In April 2025, China implemented a policy imposing tariffs of up to 125% on US chips, directly targeting the Achilles’ heel of the American chip industry—manufacturing hollowing out. This move not only puts American companies in a dilemma but also unexpectedly exposes the fatal flaw in Trump’s “chip repatriation” strategy. Wafer Fabrication Target: The “Identity Card” Trap of American Manufacturing China’s new regulations define the origin of chips as the “wafer fabrication location” rather than the design or packaging/testing location. This means that as long as the chips are fabricated in the United States, even if they are subsequently sent to Southeast Asia for packaging and labeled as “Made in Taiwan,” they will still be recognized as “Made in USA” and subject to high tariffs. For instance, if Texas Instruments (TI) produces wafers in Texas and then ships them to Malaysia for packaging, if the value added during packaging is less than 30%, it will still be considered “American goods,” with a tax rate as high as 125%. This is akin to slapping an indelible “country of origin identity card” on American chips, directly undermining Biden’s CHIPS Act—intended to compel companies to return to the US for manufacturing, but instead, China’s regulation has turned American-made chips into a “hot potato.” Following the new regulations, a large number of American chips are stuck in Hong Kong. Previously, agents would stockpile goods in Hong Kong, taking advantage of its zero tariffs and lenient customs policies to “smuggle” them in. However, customs now requires strict proof that the chips were shipped before April 10, and most companies cannot even produce the original documents. Customers have paused pickups, agents have stopped quoting prices, and the market has plunged into a panic buying frenzy with prices rising “every minute.” The spot prices of Micron DRAM and TI analog chips have doubled in a day, reminiscent of the 2021 “chip shortage frenzy,” but this time it is purely a man-made supply chain earthquake. Domestic Substitution: The “Unexpected Dividend” of the Tariff War In the short term, Chinese tech companies may face growing pains, but in the long run, it is a golden window for domestic chips. After TI and ADI were forced to raise prices, domestic manufacturers like Sanan Optoelectronics and Sierrawave quickly filled the market gap, with stock prices hitting the daily limit; SMIC and Hua Hong Semiconductor account for 35% of global capacity, expected to expand to 39% by 2027, directly countering US sanctions; if Europe simultaneously imposes tariffs on US chips, American equipment suppliers like Applied Materials will accelerate their relocation, allowing China to absorb technology and capacity. Trump’s CHIPS Act aimed to revitalize American manufacturing, but China’s tariff policy has instead forced American companies to accelerate their outflow: Intel urgently activated its wafer fabs in Ireland and Israel to supply China, while domestic capacity in the US has become a “backup plan”; this game exposes a harsh reality: America’s chip hegemony has long shifted from manufacturing to design, and China’s move has struck at its weakest link. China has torn open the facade of the US chip industry with the “wafer fabrication rule”—design remains strong, but manufacturing has decayed. This tariff war is not just a trade game, but a life-and-death struggle for dominance in the industrial chain. For the US, if it insists on “repatriating manufacturing,” it must first overcome the Chinese hurdle; while the ultimate test for China’s semiconductor industry is how to transform tariff dividends into technological breakthroughs, forging a true “Chinese chip” in the storm. Conclusion: To nurture world-class giants, one cannot rely solely on policy protection.
［Daily Exercise］
［Bird-Dog Pose – Advanced Version］
Step 1: Get on all fours, with your hands and feet shoulder-width apart.
Step 2: Engage your core, lift one hand and the opposite foot, holding for 10 seconds.Step 3: Bring your hand and foot back, lift the other hand and foot, holding for 10 seconds.
Move slowly and try to keep your body steady.
👉: Those who see this are future loyal fans.