President Donald Trump stunned markets Wednesday by announcing 100% tariffs on imported semiconductor chips — but major chip stocks rallied.
Taiwanese chip giant TSMC’s stock closed 4.9% higher. In South Korea, Samsung Electronics ended 2.5% higher while SK Hynix reversed losses of over 3% in early trade to close 1.4% up.
The rebound came as investors digested news that companies investing in US manufacturing would be exempt. TSMC already operates plants in the US, and both South Korean firms have committed to major US investments.
The Trump administration has not released specifics on the tariffs, including when they could come.
“The good news for companies like Apple is if you’re building in the United States or have committed to build, without question, in the United States, there will be no charge,” Trump said at the White House where the tech giant announced a fresh $100 billion investment plan.
Officials from Taiwan and South Korea later confirmed that their local chipmakers with US ties would be exempt from the full 100% tariff.
The US tech market already rallied overnight, with Apple closing 5.1% higher. The Nasdaq 100 closed 1.3% higher while the S&P 500 gained 0.7%.
The development “fits Trump’s approach of ‘open high, negotiate down,'” wrote Phelix Lee, a senior equity analyst at Morningstar, on Thursday.
Lee added that the final tariff rate for chipmakers could be closer to Trump’s so-called reciprocal tariffs, which would limit inflation, particularly in consumer goods that rely heavily on chips.
Trump has already exempted tech products, including smartphones, computers, and chipmaking gear, from tariffs against trading partners that kicked in on Thursday.
Despite broader economic uncertainty and tariff tensions, markets have continued to push higher in recent months.
The market rally may just reflect “sheer relief, from averting the worst, dressed up as ‘risk on,'” wrote Vishnu Varathan, Mizuho’s macro research head for Asia excluding Japan, on Thursday.
Varathan added that some industries and trade partners are simply too important to be hit with prohibitive tariffs.
“To be clear, the specific case of 100% tariffs on semiconductors ought to decimate the US tech sector, given US share of global chip production is now disproportionately small, underpinning huge reliance on imports of chips,” he wrote.
That dependence could give trade partners leverage. China, for example, could use its dominance in rare earths as a bargaining chip with the Trump administration, he added.
On Tuesday, Trump told CNBC that the US is “getting very close to a deal” with China to extend the two countries’ trade truce.
“We’re getting along with China very well,” he told the network.
