Do you save up for a new Mac, iPhone or iPad this year? You may need to save more money than you planned, especially if you live in the US, it is if President Trump’s plan to impose on computer chips in effect.
On Monday, Trump announced that duties of up to 100 percent could be imposed on chips, though he gave no specific details. The tariffs would affect almost all technology companies, including Apple that depends on the TSMC to manufacture the system on a chip in the heart of its products. TSMC is based in Taiwan and the company gets 70 percent of its revenue from North American companies importing its chips.
When a government imposes an import tariff, the company pays the government a fee for the ability to import this product to the United States to cover the cost, the company will almost certainly raise the price of the product to the consumer. In Apple’s case, the company could raise the price of MACs, iPhones and iPads to cover the duty imposed on the M and A series chips in the products made of TSMC. Apple’s other chips, such as its S-Series (Apple Watch, HomePod) and H-Series (AirPods), could also be affected.
Apple has made an effort for chip production in the United States, which could put the business in a better position if customs rates come into force. Two weeks ago, Nikkei Asia reported that TSMC’s facility in Arizona was in the final phase of verification of chips made at the plant. The first batch of chips made at this plant is expected to be “as early as this quarter” and Apple is expected to be TSMC’s largest customer in the Arizona plant.
It is not clear which chips will be made in the US to start, but they are said to be older processors with lower volume. CNBC reports that the plant will manufacture 4NM chips, which is equivalent to older Apple chips and not the current improved 3NM M4, standard 3NM M3 or the improved 3NM A18 used in current MACs and iPhones. TSMC is building another Fab in Arizona, which will reportedly be able to create 2nm chips, but it will not be ready until 2030. However, Apple is in a stronger position to quickly change at least some of TSMC’s Taiwan manufacture to the United States
However, Trump’s message and its lack of details correspond to a sample balloon. The government’s efforts to increase chip production in the United States stem from before Trump’s Presidency, and Trump’s announcement could be a negotiating tactic and a way of pushing businesses to increase their US efforts. In addition, tech managers have enjoyed President Trump to start his second period, with Tim Cook reportedly donated $ 1 million of his own money to Trump’s inauguration fund and participated in the festivities.
The Consumer Technology Association issued a report in January investigating Trump’s customs proposals. The report says there are two proposals: a 10 percent duty on all imports from all countries and a 60 percent duty on all imports from China; Or a 20 percent duty on all imports from all countries and a 100 percent duty on all imports from China. CTA calculated that tariffs would result in consumer price increases of laptops and tablets with 46-68 percent and smartphones by 26-37 percent.