Daily: Tariff exemption for chips; China buys Nvidia chips; CXMT raise DRAM prices?
6 min read.
Highlights
Trump tariff exemption for chips. Trump’s mass tariffs announced today include a provision that spares semiconductors (White House Fact Sheet). Nonetheless, Trump’s sweeping tariffs will affect other products that feed into the production of semiconductors, and there will be the indirect influence of general inflation, so prices will likely increase for semiconductors too.
Taiwan will face a 32% tariff, China is 34% (on top of the previous 20%, plus more from Trump 1.0), Korea is 25%, and Japan is 24%. A lot of markets already have free trade agreements or similar trade deals, so the reciprocal tariff thing doesn’t really make sense. E.g., Trump says Korea imposes a 50% tariff, but it’s 0% or close to it for the vast majority of trade under the USA-Korea FTA. Same for Japan.
China buys Nvidia chips. China is still very hungry for Nvidia chips, having placed orders for US$16b worth of H20 chips in the first quarter of 2025 already. If Washington is serious about hindering China’s ability to develop AI, it will likely need to further restrict chip exports. China’s self-sufficiency dream is rapidly becoming a reality, so if Washington wants to stay ahead / have its sanctions bite, it’ll need to act sooner, rather than later.
Meanwhile, Samsung’s exports to China jumped 54% from 2023 to 2024. With SK hynix selling their top-tier AI memory chips (HBMs) to the U.S. (Hynix is the sole HBM supplier to Nvidia), Samsung is selling many of their chips to Huawei and other Chinese companies. Washington also needs greater coordination with allies if they want their chip controls to be effective.
CXMT raise DRAM prices? CXMT may raise their DRAM prices. If they do, it’ll be a textbook grab for semiconductor market share. Start with lower-end chips → undercut market prices → produce massive volume → quickly take market share → edge out incumbent competitors → raise prices → rinse and repeat as you rise up the value chain. So far, CXMT has rapidly grown in market share and incumbents, Samsung and SK Hynix, are adjusting their strategy away from lower-end memory chips.
Thanks for reading.
1. Policy and Geopolitics
1.1
Reuters (04/02): Chinese firms place $16 billion in order for new Nvidia chips, the Information reports
Chinese companies including ByteDance, Alibaba Group and Tencent Holdings have placed at least $16 billion in orders for Nvidia's H20 server chips in the first three months of the year, the Information reported on Wednesday, citing two people with direct knowledge of the transactions.
In February, Reuters first reported a surge in orders for the H20 - the most advanced AI processor legally available in China under U.S. export controls - driven by booming demand for Chinese startup DeepSeek's low-cost AI models.
1.2
TrendForce (04/03): Tariff Shake-up: Taiwanese Goods Face 32% Tariff, with Semiconductors Spared for Now
After months of speculation, Trump finally pulled the trigger on April 2nd, unveiling broad reciprocal tariffs on all U.S. trade partners. Under his plan, Taiwan, which levies a 64% tariff on U.S. goods, will now face a 32% tariff on its exports to America, according to TechNews and The White House.
Notably, the report notes that a 34% tariff will be imposed on Chinese imports, adding to the existing 20% surcharge, bringing the total tariff on Chinese goods to 54%. Meanwhile, other affected nations include EU (20%), India (26%), South Korea (25%), Japan (24%), Switzerland (31%), Vietnam (46%), UK and Brazil (10% each).
Notably, according to TechNews, exemptions apply to semiconductors, copper, pharmaceuticals, energy, and minerals unavailable in the U.S., as well as steel, aluminum, automobiles, and auto parts already covered by Section 232 tariffs.
1.3
Nikkei (04/02): Vietnam's FPT launches AI and semiconductor R&D center in Da Nang
Vietnamese tech giant FPT has opened a new R&D center in Da Nang, partnering with local authorities to conduct research and develop technology and human resources in the semiconductor and AI sectors, according to the company's website.
The center, which launched last week, is located in the newly built Da Nang Software Park 2 and is expected to attract 500 tech experts through 2025. It aims to produce 10 new products a year, FPT said.
1.4
SCMP (04/03): How Malaysia’s data centres became the engine powering China’s AI ambitions
Malaysia is rapidly emerging as a key front in a global computing arms race, as Western and Chinese technology giants rush to build data centres to power their evolving artificial intelligence models.
By the end of 2025, global demand for computing power will have soared to 10 times the level seen in 2023, with more than 40 per cent coming from Asia-Pacific, research firm IDC predicts.
Many of those extra servers are concentrated in Malaysia, as the country becomes a magnet for China’s tech companies.
1.5
Tom’s Hardware (04/03): Russian spy infiltrates ASML and NXP to steal technical data necessary to build 28nm-capable fabs
German A., a 43-year-old Russian engineer, is accused of secretly supplying sensitive technical information from ASML, NXP, and TSMC to Russia, allegedly to assist in building a 28nm-capable fab there, reports NRC.
His illicit earnings were about €40,000, and he now faces 18 to 32 months in prison. Though German A. alone could not steal full designs for a semiconductor, a coordinated group could potentially assist semiconductor production in Russia.
2. Economy, Finance, and Business
2.1
FT (04/03): Samsung turns to China to prop up ailing chip business
Samsung has turned to Chinese technology groups to prop up its ailing semiconductor division, as it struggles to secure big US customers despite investing tens of billions of dollars in its American manufacturing facilities.
The South Korean electronics group revealed last month that the value of its exports to China jumped 54 per cent between 2023 and 2024, as Chinese companies rush to secure stockpiles of advanced artificial intelligence chips in the face of increasingly restrictive US export controls.
According to the consultancy SemiAnalysis, Samsung is the “biggest supplier of HBM into China”, which is used in Huawei’s Ascend 910 series of AI chips.
2.2
Nikkei (04/02): ASML to quintuple advanced EUV chip tools staff in Japan
ASML Holdings, the Dutch supplier of advanced chipmaking equipment, plans to quintuple its Japan-based maintenance staff for the machines in the next few years, Nikkei has learned.
ASML is the sole manufacturer of extreme ultraviolet (EUV) lithography equipment, essential for making leading-edge chips. In December, Rapidus became the first Japanese chipmaker to receive deliveries of the EUV machines.
3. Technology
3.1
Tom’s Hardware (04/03): Chinese DRAM maker reportedly mulls DDR4 hike prices
In a surprising turn of events, Chinese DRAM maker Changxin Memory (CXMT) is considering hiking the prices of its DDR4 memory after demand and supply stabilized, according to DigiTimes. According to TrendForce that has, CXMT is not the only company to increased DRAM pricing in recent months. Keep in mind that the information is unofficial, though.
In a bid to gain market share away from primary memory suppliers, just about six months ago CXMT and another Chinese memory maker Fujian Jinhua offered their DDR4 SDRAM chips with a 50% discount, which made them cheaper than reballed (recycled/re-used) memory ICs, which intensified price competition amid oversupply of DDR4.
As a result of demand shift to DDR4 and dumping of DDR4 memory by Chinese makers, renowned DRAM producers Micron, Samsung, and SK hynix even mulled to cease production of DDR3 and DDR4 chips by the end of the year.
3.2
Bloomberg (04/03): Huge AI Data Center Planned for Pennsylvania Coal Plant Site
An $10 billion natural gas-powered data center to serve the surging demands of artificial intelligence is being planned for the site of a former coal-fired power plant in Pennsylvania.
The data center campus will be developed with gas-fired turbines built by GE Vernova Inc. about 50 miles east of Pittsburgh at the location of Homer City Generation, previously the state’s largest coal plant, Homer City Redevelopment and Kiewit Power Constructors Co. said Wednesday in a statement.
3.3
TrendForce (04/03): Kaynes Semicon to Achieve Major Milestone with India’s First Packaged Chip in July 2025
According to a report from The Economic Times, Indian company Kaynes Semicon is set to deliver the country’s first packaged semiconductor chip in July 2025.
As the report highlights, Kaynes CEO Raghu Panicker has confirmed the timeline. It also states that the pilot line is “almost” complete, with machinery and cleanroom facilities scheduled to go into operation in May
Qualification testing is scheduled for June, with the first chip samples to be sent to U.S. semiconductor company Alpha Omega Semiconductor in July. The initial phase of the collaboration is expected to utilize 60% of the plant’s production capacity, as the report notes.
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