US President Donald Trump’s renewed push to bring microchip manufacturing back to America faces stiff resistance from decades of Asian dominance, as industry experts warn that tariffs, labour shortages, and a lack of long-term investment could undermine the effort.
Trump’s plan to revive chip production in the United States, centred around tariffs and incentives, seeks to restore a sector long dominated by Asian nations like Taiwan, South Korea, Japan, and increasingly, China. But experts warn the challenge is far greater than protectionist policy can solve.
Semiconductors, essential for devices ranging from smartphones to fighter jets, were first developed in the US. Yet over time, production migrated to Asia, where nations offered extensive government support and built intricate, collaborative supply chains.
Despite receiving billions in federal grants through the 2022 Chips and Science Act, companies like Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung have faced hurdles in the US. Issues such as soaring costs, labour shortages, and construction delays have slowed progress.
“Factories that produce chips are sterile, high-tech environments that take years to build,” said Marc Einstein of Counterpoint Research. “You can’t just magic PhDs out of nowhere.”
TSMC is investing over $100 billion in US operations under Trump-era pressure, but maintains that its most advanced chips will remain Taiwan-made. Even its Arizona facilities lag a generation behind its home plants.
While Trump has threatened TSMC with 100% tariffs if it fails to build in the US, the ecosystem required to support domestic chip production—rare earths, clean water, skilled labour, and cross-border cooperation—is deeply global.
China, Taiwan, South Korea, and Japan have long subsidised chip production, allowing them to dominate the industry. By contrast, Trump’s tariff-first approach and immigration policies risk alienating skilled workers, further limiting America’s capacity to scale production.
“Trump can’t just build a bigger building and call it chip sovereignty,” Einstein added. “Even Elon Musk has had trouble hiring the right engineers under current policies.”
Despite obstacles, firms like Apple, Nvidia, and Microsoft may influence future policy. Industry lobbying reportedly helped secure tariff exemptions during Trump’s first term, and insiders believe similar efforts could shape any second-term decisions.
But the broader lesson from Asia, analysts say, is that chip success depends on cooperation. Trump’s emphasis on economic isolation could undermine the very collaboration that built the modern chip supply chain.
As Trump positions semiconductors as a pillar of US national security and economic revival, critics warn that rebuilding a chip empire isn’t just a matter of money or tariffs—it’s a global challenge decades in the making.
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