US tariffs may cost chip equipment makers more than $1 billion, industry estimates

President Trump’s caller tariffs could costs U.S. semiconductor instrumentality makers much than $1 cardinal a year, according to manufacture calculations discussed pinch officials and lawmakers successful Washington past week, 2 sources acquainted pinch nan matter said.

Each of nan 3 largest U.S. spot instrumentality makers — Applied Materials, Lam Research and KLA — may suffer a nonaccomplishment of roughly $350 cardinal complete a twelvemonth related to nan tariffs, nan sources said. Smaller rivals specified arsenic Onto Innovation may besides look tens of millions of dollars successful other spending.

The imaginable billion-dollar costs to nan spot instrumentality manufacture and talks betwixt manufacture executives and U.S. officials complete respective days about those costs are reported present for nan first time.

The companies build immoderate of nan world’s astir highly sought-after chipmaking instrumentality that tin require thousands of specialized parts.

Chip instrumentality makers person already mislaid billions successful gross aft then-President Biden implemented a series of export controls aimed astatine curbing nan shipment of precocious semiconductor manufacturing instrumentality to Chinese entities.

The Trump management has largely paused the reciprocal tariffs it announced in April. But to spur much U.S. manufacturing, it is weighing further duties connected nan spot manufacture and initiated a probe into their imports connected Monday.

The estimated costs discussed past week successful Washington see mislaid revenue, chiefly for missed income of little blase instrumentality to overseas rivals, and nan costs of uncovering and utilizing replacement suppliers for nan analyzable components of chipmaking tools. The estimate besides includes tariff compliance costs, specified arsenic adding unit to grip nan complexities of pursuing nan rules.

Lawmakers and management officials discussed nan tariff costs pinch spot manufacture executives and officials from SEMI, an international waste and acquisition group, arsenic portion of an ongoing dialog.

Applied did not respond to a petition for comment. KLA and Lam declined to comment.

The early, unsmooth estimate of $350 cardinal per institution could alteration arsenic nan Trump administration’s duties return effect. Quick calculations are difficult to make because each chipmaking instrumentality has aggregate components, and nan eventual tariff authorities is unclear.

The Biden management cracked down connected China’s spot manufacture complete 3 years to hobble its expertise to nutrient cutting-edge chips utilized successful artificial intelligence, subject applications aliases different ways that could frighten U.S. nationalist security.

The U.S. export controls have spurred China to put successful its home spot instrumentality industry.