Semiconductor Stocks Exposed To China With Tariffs Incoming

Semiconductor stocks will come into focus in 2025 as geopolitical tensions rise. China is likely to retaliate following Trump’s most recent threats of 10% additional tariffs to all Chinese goods. This escalation in tariffs and retaliation is expected to have an impact on semiconductor sales in China, particularly affecting chipmakers with higher exposure to China.

As a result, wafer fab equipment spending in China is expected to take a rather large hit next year. Wafer fab equipment refers to the equipment used to process wafers into chips, through processes like etching, deposition, and through ultraviolet wavelengths in a process called EUV lithography.Selena Gomez And Benny Blanco Are Engaged—And The Internet Has Opinions, putting it on track to spend $50 billion this year for the first time ever.

On the other hand, some of the market’s leading AI players have the lowest China exposure, with less than 20% of revenue from China.Despite being the subject of some of the strictest export restrictions for its leading AI GPUs, Nvidia has some of the lowest exposure to China as a percentage of revenue, alongside competitor AMD and key suppliers Micron and TSMC.

Micron’s China exposure has hovered in the 16% of revenue range for FY22 through FY24, due to bans from China limiting its growth in the nation. While the low exposure to China may seem like a positive, Micron faces competitive headwinds and pressure from Chinese firms in its primary markets. Analysts questioned management about China capacity hitting the market, and if it would have any impacts on Micron’s business.

What this means is that not only will semiconductors face geopolitical risks from tariff threats and a possible trade war, but they will also face a tougher selling climate in China as the country pushes for more domestic production towards its goal for 70% semiconductor self-sufficiency by the end of 2025.

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