ARTICLE
Tariff risk may reshape semiconductor demand – AI most resilient
Bloomberg Intelligence
This analysis is by Bloomberg Intelligence Senior Industry Analyst Kunjan Sobhani and Senior Associate Analyst Oscar Hernandez Tejada. It appeared first on the Bloomberg Terminal.
While semiconductors are exempt from new tariffs, we believe most will face indirect pressure via demand destruction, as chips are assembled into final products through global supply chains. AI-focused players like Nvidia appear most insulated, supported by enterprise demand, CSP-driven AI buildouts and low price elasticity.
By contrast, analog and consumer semiconductors — exposed to PCs, handsets, autos, and industrials — may see more disruption. USMCA exemptions, onshoring incentives and potential policy offsets tied to AI investment could soften the blow for some.
US semiconductor tariff impact matrix
Nvidia more tariff resistant than peers with AI, USMCA exposure
AI semiconductor makers, especially Nvidia, might be more resilient than other chipmakers in a tariff-driven downturn thanks to stable enterprise and hyperscaler demand. Most Nvidia GPUs are part of systems with Mexican supply chains that could exempt over half of its US imports, softening supply-side pressure from trade tensions.
Tariff risk cut by Mexico, Canada exemption
Nvidia’s AI systems could be party insulated from tariff risk. Though most GPUs aren’t sold as stand-alone semiconductors, they ship in complex systems packed with nonchip components, many assembled abroad and possibly subject to levies. But a large share of those can qualify for USMCA exemptions if built in Mexico or Canada. We believe 40-60% of Nvidia’s US-bound system imports could fall into that category, limiting tariff exposure.
AI-server OEMs, which integrate Nvidia GPUs into full racks, also have significant manufacturing capacity in Mexico and the US, further blunting the direct impact from duties. That said, as much as half of Nvidia’s components — especially switches, networking gear and gaming SKUs — are built in Asia, primarily Taiwan, and may remain exposed even if final assembly occurs in the US.
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