Newly appointed President Donald Trump recently confirmed his plans to impose tariffs on imported chips, apart from pharmaceuticals, and steel. With these upcoming tariffs, Trump is aiming to incentivize production in the US. Most importantly, Trump has planned to impose nearly 25% to 100% tariffs on Taiwan-made chips. The upcoming tariffs have put the Taiwan-based chip makers in a frenzy and they’ve started making new strategies to tackle the situation. MediaTek, one of Taiwan’s incredibly important chip makers, has also been preparing for the possibility of Trump’s tariffs on products from Taiwan.
MediaTek is running simulations to predict potential outcomes from Trump’s tariffs
During a quarterly earnings call, MediaTek’s CEO Rick Tsai said that the brand has been preparing for the possibility of the upcoming Trump tariffs on Taiwanese products. Tsai said that MediaTek is running simulations to predict the potential outcomes of the US tariffs. However, Tsai believes that the impact on the company this year from these tariffs will be “manageable”.
Tsai also acknowledged the unpredictable nature of the situation. He also expressed uncertainty about the longer-term effects of the new tariffs. The MediaTek CEO emphasized that many variables are at play here. Tsai hasn’t provided any specific details on how the company will respond to Trump’s tariffs.
The tech industry is facing unpredictability from the Chinese startup DeepSeek AI
It’s worth mentioning that the tech industry is also facing unpredictability from the Chinese startup DeepSeek AI. DeepSeek AI is offering artificial intelligence-powered LLM models at a fraction of the cost of rival models. In addition, the company’s AI models allegedly require less sophisticated chips.
It has raised questions over West’s huge investments in chipmakers like NVIDIA and data centers. Tech stocks worldwide plunged on January 27 soon after the launch of DeepSeek AI. “With the recent DeepSeek phenomenon, we are becoming more optimistic”, Tsai said. “The trend is democratizing AI. It will spread more for average users”, he added further.
It’s worth adding that TSMC, Taiwan’s biggest chip maker will also have to face Trump’s tariffs. Reports indicate that the company is considering increasing the cost of chip production by up to a whopping 15 percent. It is much higher than the previously planned increase of nearly five percent. We will have to wait and watch how the Taiwanese tech companies will deal with this situation.
