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Taiwanese semiconductor company Vanguard International Semiconductor has cautioned that U.S. tariffs on imported chips could trigger inflation and hamper global economic growth, though the firm expects any direct impact on its business to be minimal.
Speaking on a post-earnings call, Vanguard Chairman Leuh Fang adopted a “wait and see” approach amid uncertainty over how far the Trump administration will pursue its tariff threats. Last week, President Donald Trump announced plans to impose around 25% tariffs on auto imports as well as similar duties on semiconductors and pharmaceutical products - a move that could disrupt international trade flows.
"If tariffs are implemented... it will cause many impacts, from inflation to a decline in end-product purchasing power, and even affect expected economic growth," Fang told analysts. However, he added that Vanguard’s exposure is limited since the company manufactures legacy, or mature node chips used primarily in cars and display panels. “The proportion of our company’s semiconductor products directly exported to the U.S. and facing tariffs is very low,” he said.
The announcement comes as tensions between the U.S. and China continue to shape the global semiconductor market. Amid aggressive capacity expansion and steep price cuts by Chinese foundries, many American customers have begun shifting orders to Taiwanese suppliers- a trend that Fang expects will intensify.
In related news, industry rival TSMC is building chip factories in Arizona, while several Taiwanese laptop and AI server makers are also considering moves to expand U.S. production to circumvent potential tariff impacts. Notably, TSMC owns 27.15% of Vanguard’s shares, underlining the interconnected nature of the regional supply chain.
For the quarter ended December 31, Vanguard posted a 19.4% year-on-year increase in revenue to T$11.55 billion ($352 million) and a 48.7% jump in gross profit to T$3.314 billion, reflecting strong performance despite the broader market uncertainties.
As the global semiconductor industry braces for possible trade disruptions, Vanguard’s cautious outlook underscores the complex interplay between tariff policies, inflationary pressures, and shifting supply chains in an increasingly volatile economic environment.
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