Tariffs Push US Wafer Fab Equipment Costs Up 15% for Domestic Fabs

[AleksandarK]

As the US works to bring more semiconductor manufacturing back home, the machines needed to turn silicon into the world's most advanced processors are becoming pricier and harder to get, thanks to tariffs. Foundries building new fabs report that the specialized equipment they rely on, everything from extreme ultraviolet (EUV) lithography steppers to chemical vapor deposition chambers, carries a roughly 15% premium compared with similar gear sold overseas. Several forces are at play. The raw materials, high‑grade quartz for vacuum enclosures, and exotic metal alloys for precision optics have climbed in price. At the same time, key components like ultra‑accurate motion stages and alignment sensors are in short supply, sometimes stretching lead times for critical subsystems well beyond 18 months. For a fab racing to move from a 7 nm to a 5 nm process, those delays can mean missing tight ramp‑up targets and pushing out product launches.

Smaller chipmakers feel the squeeze the hardest. With fewer orders to negotiate volume discounts, second‑tier foundries may see their capital budgets balloon by 20 percent or more. In response, some are taking a mixed approach, sourcing commoditized tools such as oxidation furnaces and rapid thermal processors from multiple suppliers while reserving single‑vendor deals for high‑stakes systems like EUV scanners. Government support through the CHIPS Act offers a partial safety net, helping to subsidize capital expenditures. Yet even with grants and tax credits, the challenges will remain. Success will hinge on tight coordination between fabs, equipment makers, and policymakers to tame rising costs, shorten delivery schedules, and keep America's chip renaissance on track.



View at TechPowerUp Main Site | Source

 

[biffzinker]

Hello, knock on effect because all the fancy equipment comes from outside the US for those companies to fabricate chips in the US.

 

[Bobaganoosh]

It's an interesting theory...you make it so expensive to order anything from overseas that the big manufacturing companies will have to try and move manufacturing the the US (in theory).
Meanwhile, manufacturers of any other goods that rely on parts that can only be sourced from overseas either have to raise their prices or go out of business. To cut costs they'll likely fire staff. So there may be unemployed people to work in said new factories...which would take years to build...the market for those products having dried up after the business demanding those US-made parts go out of business because they couldn't pay their whole staff an extra 30-50% to keep up with the ultra-inflation generated by the tariffs. So then...what? Who's left standing?

Meanwhile other countries have less demand from the US for their products, but they'll set up new deals with other countries and they'll be fine, continuing to pass the US in what they can produce and leading tech supplies. So the tariffs put the US even farther behind from a technology perspective. The only people I can see benefiting from any of this are the people who have enough money to invest in stocks that tank if we assume they all bounce back after a US regime change, but this could cause a lot of businesses in the US to fall drastically behind the competition and it's hard to see them recovering anytime soon. That said, trying to steer as far from politics as I can while broaching this particular tech topic, the winds and decisions can change any time and no decision seems permanent on any of this stuff. So it will be a question of how much damage and how lasting will it be? Nobody knows.

 

[mtosev]

Tariffs are always a bad idea.

 

[Space Lynx]

Tariffs are always a bad idea.

there are a lot of things about tariffs I just don't understand, like when people say Canada has 200% tariffs on USA dairy farmers, so they can protect their own farmers, etc.

i honestly have no idea what is going on anymore, i just find it all sad to be honest. we all want to be prosperous and flourish. the idea of the nation state is just an expanded idea of the concept of the ancient greek city-state, humans and their tribalism is so stupid for invisible lines in a map, when at the end of the day, most of is just want the same basic things. food security, affordable housing, some form of entertainment, etc etc

 

[MxPhenom 216]

there are a lot of things about tariffs I just don't understand, like when people say Canada has 200% tariffs on USA dairy farmers, so they can protect their own farmers, etc.

i honestly have no idea what is going on anymore, i just find it all sad to be honest. we all want to be prosperous and flourish. the idea of the nation state is just an expanded idea of the concept of the ancient greek city-state, humans and their tribalism is so stupid for invisible lines in a map, when at the end of the day, most of is just want the same basic things. food security, affordable housing, some form of entertainment, etc etc

And its not just a blanket tariff either. That 200% only kicks in after a specific amount has been imported (negotiated via current Administration 1st term during the NAFTA => USMCA). It's a supply-controlled tariff. People in support of this trade war fail to recognize that and its annoying asf.

 

[the54thvoid]

And its not just a blanket tariff either. That 200% only kicks in after a specific amount has been imported (negotiated via current Administration 1st term during the NAFTA => USMCA). It's a supply-controlled tariff. People in support of this trade war fail to recognize that and its annoying asf.

Yes - the high tariffs are when an allowed import level is exceeded. The US in many cases is the major beneficiary in the 'tariff free' level (due to it's purchasing power). Once that is surpassed, EVERYONE pays the higher tariff, not just the US.

As far as the OP is concerned - it's no surprise. This is what happens with taxes on imports.

 

[Deleted member 187435]

Tariffs are always a bad idea.

Not always I'd say, carefully targeted ones for a specific reason like to prevent dumping can be useful and the EU has used those, otherwise a home industry can be decimated by another country aggressively subsidising production etc. But Trump's blanket approach is hopeless and will ultimately be self-defeating.

 

[Rover4444]

I'm okay with tariffs. The US is the largest consumer market in the world, it's time for it to make it's own shit. Prices will rise, but at least those profits will be reinvested back into the country... theoretically.

 

[Space Lynx]

I'm okay with tariffs. The US is the largest consumer market in the world, it's time for it to make it's own shit. Prices will rise, but at least those profits will be reinvested back into the country... theoretically.

yeah into CEO's yacht club memberships. the worker is still going to be treated like shit with no fair wage and given no safety nets that EU, Australia, Japan, New Zealand, etc etc other countries have.
that's the way it is has always been in USA though, so i don't really give a fk, i plan on moving to a diff country someday. fk this place, enjoy your 22 grand bill for staying in the hospital for one single night lol

 

[tabascosauz]

I don't think it needs any explaining why this thread will be locked.