Shares of US chipmakers come under pressure after China retaliates with tariff hikes

U.S. markets closed lower Friday after China announced steep tariff hikes on American goods, targeting semiconductors manufactured in the U.S. Texas Instruments fell 6.8%, Intel dropped 3.7%, and GlobalFoundries declined 2.4% amid fears of disrupted trade flows.

Shares of Nvidia and TSMC rose, buoyed by their offshore manufacturing. Analysts warn of escalating uncertainty in the sector, with sentiment now tightly linked to any progress on U.S.-China trade negotiations.

Shares of U.S. chipmakers with domestic manufacturing operations came under sharp pressure on Friday after China announced a steep escalation in tariffs on American goods, stoking fresh concerns over the ongoing trade tensions between the world’s two largest economies.

Beijing said it will raise duties on U.S. imports from 84% to 125%, a move widely interpreted as a direct response to Washington’s earlier tariff measures. The China Semiconductor Industry Association clarified that the new customs rules would assess origin based on where chips are manufactured rather than the home country of the parent company—exposing firms with U.S.-based fabs to additional vulnerability.

Texas Instruments Inc. and Intel Corp. were among the hardest hit, with shares declining 6.8% and 3.7%, respectively. GlobalFoundries Inc. dropped 2.4%, while other chipmakers with manufacturing facilities in the U.S., including Analog Devices Inc. and Microchip Technology Inc., also traded lower. Skyworks Solutions Inc. and Qorvo Inc., both key suppliers to Apple Inc., were not spared from the selloff.

“This is an incredibly uncertain time for chipmakers, and this is certainly not going to help,” Wayne Kaufman, chief market analyst at Phoenix Financial Services told Bloomberg. “Anything that hurts semis more than they’ve already been hit is bad for the general market.”

Not all chipmakers were negatively affected. The tariffs exclude companies that design semiconductors but do not manufacture them domestically. As a result, Nvidia Corp. rose 2.2%, while U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. gained 3.3%. Analysts noted this divergence, highlighting the potential for non-fabricating players to benefit from redirected demand and capacity.

Experts believe that the market may be overreacting in the case of Texas Instruments, pointing to the company’s long-standing advantages in product quality, breadth, cost structure, and customer support. Though TI’s share in China could erode somewhat, TI benefits from product performance would be difficult for Chinese OEMs to ignore altogether, they point out.

  losses, market closure, Nvidia, semiconductor chips, texas instruments, US trade tariffs, wall street