US tariffs may cost chip equipment makers more than $1 billion, industry estimates
President Trump’s recent implementation of new tariffs has the potential to cost U.S. semiconductor equipment manufacturers over $1 billion annually, according to industry estimates discussed with officials and lawmakers in Washington. This could result in significant losses for major players in the industry such as Applied Materials, Lam Research, and KLA, with each company facing a potential loss of around $350 million. Smaller competitors like Onto Innovation may also feel the impact with millions of dollars in additional expenses.
The chip equipment industry has already suffered substantial revenue losses due to export controls imposed by the Biden administration aimed at restricting the sale of advanced semiconductor manufacturing equipment to Chinese entities. While the Trump administration has temporarily halted the implementation of reciprocal tariffs announced in April, it is considering further duties on the chip industry and has initiated an investigation into their imports.
Discussions in Washington last week highlighted the estimated costs associated with the tariffs, including lost revenue, expenses related to seeking alternative suppliers for components, and compliance costs. Lawmakers and industry executives engaged in dialogue to address these concerns, with the potential impact on each company subject to change as the tariff regime becomes clearer. The Biden administration’s efforts to limit China’s chip industry growth have prompted the country to invest in its domestic chip equipment sector.
Despite the challenges facing the chip equipment industry, companies like Applied, KLA, and Lam remain resilient in navigating the evolving trade landscape. As the industry adapts to changing policies and market conditions, the future of semiconductor manufacturing equipment in the U.S. remains uncertain but promising.
