U.S. semiconductor equipment manufacturers are facing a potential financial hit exceeding $1 billion a year as a result of new tariffs being considered by the Trump administration, according to industry estimates shared with Washington officials last week.
Sources familiar with the discussions revealed that top American companies such as Applied Materials, Lam Research, and KLA each stand to lose approximately $350 million annually. The losses stem not only from reduced overseas sales but also from the added burden of finding alternative suppliers and navigating complex compliance requirements.
Smaller players in the industry, like Onto Innovation, may also face tens of millions of dollars in increased costs, further amplifying concerns across the chipmaking sector.
These projections—reported for the first time—were presented during a series of closed-door meetings between industry executives, U.S. lawmakers, and officials from SEMI, the global trade association representing semiconductor equipment and materials companies.
The proposed tariffs are part of a broader trade and national security strategy, with the Trump administration weighing duties to stimulate domestic manufacturing and reduce reliance on foreign suppliers. On Monday, a formal probe was launched into chip equipment imports, signaling a potential ramp-up of protectionist measures.
However, the industry’s warning highlights the unintended consequences of such tariffs, especially given the intricate global supply chains involved in semiconductor manufacturing. Each chipmaking machine comprises thousands of specialized components, many of which are sourced internationally.
The expected costs include lost revenue from decreased sales of legacy equipment to foreign buyers, supplier-switching expenses, and tariff compliance—such as hiring staff to manage new regulatory complexities.
The chip equipment industry had already taken a financial blow under the Biden administration’s aggressive export controls, which aimed to restrict the sale of advanced manufacturing tools to Chinese firms due to concerns over artificial intelligence, military applications, and national security threats.
Those measures led to billions in lost revenue and prompted China to double down on developing its domestic chip equipment ecosystem, accelerating the global tech decoupling.
