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Trump says tariffs to target non-US chip producers,

excludes

those building in America

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TSMC likely exempt due to US factories, aiding Nvidia ( NVDA )

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Chip tariffs may impact China, SMIC, Huawei products

(Adds quotes and background in paragraphs 3-6, 9-12; adds

bullet points)

By Andrea Shalal, David Shepardson and Arsheeya Bajwa

WASHINGTON, Aug 6 (Reuters) - The United States will

impose a tariff of about 100% on semiconductor chips imported

from countries not producing in America or planning to do so,

President Donald Trump said.

Trump told reporters in the Oval Office on Wednesday the new

tariff rate would apply to "all chips and semiconductors coming

into the United States," but would not apply to companies that

had made a commitment to manufacture in the United States or

were in the process of doing so.

"If, for some reason, you say you're building and you

don't build, then we go back and we add it up, it accumulates,

and we charge you at a later date, you have to pay, and that's a

guarantee," Trump added.

The comments were not a formal tariff announcement, and

Trump offered no further specifics.

It is not clear how many chips, or from which country, would

be impacted by the new levy. Taiwanese chip contract

manufacturer TSMC - which makes chips for most U.S.

companies - has factories in the country, so its big customers

such as Nvidia ( NVDA ) are not likely to face increased tariff

costs.

The AI chip giant has itself said it plans to invest

hundreds of billions of dollars in U.S.-made chips and

electronics over the next four years. An Nvidia ( NVDA ) spokesperson

declined to comment for this story.

"Large, cash-rich companies that can afford to build in

America will be the ones to benefit the most. It's survival of

the biggest," said Brian Jacobsen, chief economist at investment

advisory firm Annex Wealth Management.

Congress created a $52.7 billion semiconductor manufacturing

and research subsidy program in 2022. The Commerce Department

under President Joe Biden last year convinced all five

leading-edge semiconductor firms to locate chip factories in the

U.S. as part of the program.

The department said the U.S. last year produced about 12% of

semiconductor chips globally, down from 40% in 1990.

Any chip tariffs would likely target China, with whom

Washington is still negotiating a trade deal.

"There's so much serious investment in the United States in

chip production that much of the sector will be exempt," said

Martin Chorzempa, senior fellow at the Peterson Institute for

International Economics.

Since chips made in China won't be exempt, chips made by

SMIC or Huawei would not be either, Chorzempa said, noting that

chips from these companies entering the U.S. market were mostly

incorporated into devices assembled in China.

"If these tariffs were applied without a component tariff,

it might not make much difference," he said.

Chipmaking nations South Korea and Japan, as well as the

European Union, have reached trade deals with the U.S.,

potentially giving them an advantage.

The EU said it agreed to a single 15% tariff rate for

the vast majority of EU exports, including cars, chips and

pharmaceuticals. South Korea and Japan said separately that U.S.

agreed not to give them worse tariff rates than other countries

on chips, suggesting a 15% levy as well.

(Reporting by Andrea Shalal, Kanishka Singh and David

Shepardson in Washington, Arsheeya Bajwa in Bengaluru;

Additional reporting by Akash Sriram in Bengaluru and Hyunjoo

Jin in Seoul; Editing by Leslie Adler, Chris Reese, Sayantani

Ghosh and Lincoln Feast.)