Apr 14, 2025 14:19:00

China changes semiconductor tariff rules to 'where the materials are made, not where they are sold,' allowing American AMD and NVIDIA products manufactured by Taiwanese companies to avoid 125% tariffs

China, which is engaged in a trade war with the United States over tariffs, has changed the rules for classifying the country of origin of imported semiconductors, stating that 'the place where

the wafer is manufactured should be counted as the place of origin of the semiconductor.' This will allow products from manufacturers such as AMD and NVIDIA, which outsource their manufacturing to Taiwanese companies, to avoid the tariffs that China imposes on the United States.

China's new semiconductor rule spares Taiwan fabs, punishes Intel, GlobalFoundries & Texas Instruments | Tom's Hardware
https://www.tomshardware.com/tech-industry/chinas-new-semiconductor-rule-spares-taiwan-fabs-punishes-intel-globalfoundries-and-texas-instruments

US chipmakers outsourcing manufacturing will escape China's tariffs | Reuters
https://www.reuters.com/technology/us-chipmakers-outsourcing-manufacturing-will-escape-chinas-tariffs-2025-04-11/

The United States imposed a 145% tariff on Chinese goods under its 'reciprocal tariff' policy, and the Chinese government responded by imposing an additional 125% tariff on the United States.

In response to the strengthening of tariffs, the China Semiconductor Industry Association issued an emergency notice on the rules for semiconductors imported by China, changing the rules for classifying the country of origin so that the origin of the semiconductor material 'wafer' will be counted as the origin of the semiconductor, regardless of where the semiconductor is developed or packaged.

This means that semiconductor companies such as AMD, NVIDIA, Qualcomm, and Intel, who outsource their manufacturing to Taiwanese companies such as TSMC, will be exempt from Chinese tariffs, even though they design and sell their semiconductors in the United States.

'This will remove barriers for Chinese companies to import American products, making it easier for China to obtain key products like semiconductors. In addition, by not imposing import tariffs, China can claim Taiwan as its territory. At the same time, it will punish semiconductor companies that manufacture in the United States,' Tom's Hardware, a technology media outlet, said.

China is focusing on domestically producing many of the semiconductors known as 'legacy chips,' but many of the high-performance semiconductors that can be used for AI are reliant on American companies. American companies also see China as one of their major markets, so they are sensitive to export restrictions and tariffs, and it has been reported that the CEO of American company NVIDIA directly petitioned President Trump to avoid export restrictions.

NVIDIA CEO Jensen Huang pays 150 million yen to dine with President Trump, after which export restrictions on 'H20' chips are lifted - GIGAZINE

Furthermore, the United States considers the place where a product last underwent significant transformation to be its country of origin, so for example, a product developed in the United States, manufactured in Japan, and packaged in China would be considered a Chinese product.