WASHINGTON, September 26, 2025 – The Trump administration is considering mandating chip companies maintain a 1:1 ratio of domestic to imported semiconductor production to reduce overseas reliance.
The policy would force major chipmakers to restructure global supply chains, potentially impacting companies like Taiwan Semiconductor Manufacturing (TSM) and NVIDIA (NVDA) that rely heavily on Asian production.
- 1:1 domestic-to-import ratio proposed for semiconductor companies
- Non-compliance would trigger tariff penalties
- Aims to reduce US dependence on foreign chip production
Policy Details and Market Impact
Companies failing to maintain the balanced production ratio over time would face tariff penalties, according to the Wall Street Journal report 1. The proposal represents a significant escalation in US efforts to onshore critical semiconductor manufacturing capacity.
The semiconductor sector has been volatile amid ongoing trade tensions, with the Philadelphia Semiconductor Index declining 8% over the past month as investors weigh supply chain disruption risks. Major chip stocks could face additional pressure if the policy moves forward.
Strategic Manufacturing Shift
The mandate would require chip companies to manufacture domestically the same number of semiconductors that their customers import from overseas facilities 2. This represents a fundamental shift from current industry practices where most advanced chip production occurs in Taiwan, South Korea, and other Asian markets.
The policy aligns with broader Trump administration goals to reduce US technological dependence on foreign suppliers, particularly amid ongoing tensions with China. Current US semiconductor manufacturing capacity represents less than 15% of global production, down from nearly 40% in the 1990s.
Industry Response and Implementation
Industry analysts expect significant pushback from chipmakers, given the massive capital investments required to establish new US fabrication facilities. Building advanced semiconductor plants typically costs 15-20 billion and takes three to five years to complete.
“The Trump administration is considering a plan to mandate a 1:1 ratio of domestically manufactured to imported semiconductors,” the Wall Street Journal reported 1.
Investment Implications
The proposal could benefit US-based chip manufacturers like Intel (INTC) and GlobalFoundries, while potentially pressuring companies with heavy overseas production dependencies. Equipment suppliers such as Applied Materials (AMAT) might see increased demand for domestic facility construction.
However, implementation challenges and potential retaliatory measures from trading partners could create near-term market volatility across the semiconductor sector. Investors should monitor regulatory developments closely as the administration finalizes policy details.
Not investment advice. For informational purposes only.
References
1Trump Takes Aim at Chip Makers With New Plan to Throttle Imports. Wall Street Journal. Retrieved September 26, 2025.
2US plans 1:1 chip production rule to curb overseas reliance, WSJ. Reuters. Retrieved September 26, 2025.
3US plans to mandate a 1:1 ratio of domestically manufactured to. Yahoo Finance. Retrieved September 26, 2025.
4US plans to require a 1:1 ratio of domestically made to imported. Investing.com. Retrieved September 26, 2025.
5US plans to mandate a 1:1 ratio of domestically manufactured to. Economic Times. Retrieved September 26, 2025.
6US Plans to Require a 1:1 Ratio of Domestically Made to Imported. US News. Retrieved September 26, 2025.
7US plans to require a 1:1 ratio of domestically made to imported. Straits Times. Retrieved September 26, 2025.