3 Key Takeaways This Month

• Tariff Pause Signals Temporary Relief: The Trump administration paused new Section 301 tariffs on Chinese semiconductors amid negotiations. This provides short-term breathing room for supply chains but leaves long-term policy friction unresolved.
• Google I/O Spotlights Custom AI Chips: Google’s unveiling of its TPU v6 and Gemini 2.5 platform underscores the hyperscaler shift toward in-house AI silicon boosting demand for advanced memory, packaging, and compute innovations.
• Hyperscalers Intensify AI Silicon Race: From Microsoft’s AMD-powered builds to Amazon’s acceleration of Trainium2, hyperscalers are shaping next-gen silicon strategy, transforming the competitive landscape for semiconductor players.

Semiconductor Industry Snapshot

April Recap Highlights

• The U.S. paused the rollout of expanded Section 301 semiconductor tariffs as part of renewed negotiations with China. This signals a potential opening in trade tensions but continues to fuel uncertainty around long-term supply chain stability.
• Google I/O 2025 introduced TPU v6 chips, co-developed with Broadcom, delivering major improvements in training and inference for large models like Gemini 2.5. The emphasis on in-house silicon aligns with ongoing hyperscaler trends toward vertical integration.
• Microsoft announced a major AI infrastructure buildout using both AMD’s new MI325X GPUs and NVIDIA’s Blackwell Ultra chips, confirming robust demand for advanced compute silicon.
• Amazon is reportedly fast-tracking Trainium2 and Inferentia3 development as part of a broader strategy to reduce dependence on external GPU vendors.
• On the geopolitical front, labor and investment concerns persist. While CHIPS Act projects continue to advance, the U.S. Investment Accelerator's oversight remains a wildcard for timelines and execution confidence.

Top Semiconductor Stories

Tariff Pause Reflects Strategic De-escalation

In a notable shift, the U.S. Trade Representative announced a temporary halt to new Section 301 tariffs on Chinese semiconductor imports. The move is intended to allow more constructive negotiations with Beijing and avoid immediate supply chain disruption. Semiconductor players with heavy China exposure, such as Qorvo and ON Semiconductor, are seeing short-term relief. However, the long-term policy direction remains uncertain, especially amid ongoing congressional scrutiny.

Hyperscalers Expand Custom Silicon Ambitions

At Google I/O, the release of TPU v6 built for Gemini 2.5 and future LLMs highlights how hyperscalers are increasingly designing their own silicon. Co-development with Broadcom signals rising interest in semi-custom models. Microsoft’s AI stack, now incorporating AMD’s MI325X alongside NVIDIA's Blackwell GPUs, shows a multi-vendor approach to compute. Meanwhile, Amazon is accelerating development of Trainium2 and Inferentia3. These moves reinforce demand for HBM memory, advanced packaging, and fabless logic expertise.

CHIPS Act Oversight Looms Over Execution

While more than $30 billion in CHIPS Act funding has been earmarked, the U.S. Investment Accelerator’s new review authority is already creating friction. Industry insiders warn that delays may affect critical fabs, particularly TSMC Arizona and Samsung Texas. Though aimed at improving project efficiency, the lack of clarity on approval processes is affecting private-sector confidence and timeline visibility.

Sector Headwinds & Tailwinds

What’s Working:

• Micron: Continuing to benefit from HBM demand driven by AI growth, with additional momentum from IoT and edge memory segments.
• Broadcom: Strengthening position as a custom silicon partner to hyperscalers.
• AMD: Riding strong sentiment following Microsoft’s endorsement of the MI325X for AI infrastructure builds.

What’s Challenged:

• NVIDIA: Hyperscalers developing their own silicon in partnership with companies like Broadcom leaves a lot of unknowns with Nvidia’s near term revenues.
• Qorvo & ON Semiconductor: Despite tariff pause, long-term China exposure remains a risk variable.
• Labor Shortages: With many CHIPS Act projects now in the execution phase, the talent bottleneck, especially for 4-year technical roles, remains a concern.

Looking Ahead

The next phase of the semiconductor cycle will be shaped by how three forces converge: policy, hyperscaler strategy, and supply chain resilience. Stay tuned for updates on U.S.-China tariff negotiations, formal AI chip roadmaps from Amazon and Meta, and clarification from the U.S. Investment Accelerator on project approvals.

Catch Up on Last Month’s Updates Below

Tightening Tariffs and CHIPS Act Changes

3 Key Takeaways in April

• Tariff Pressures Rise: Tariffs continued under the Section 301 framework now more clearly target semiconductors, amplifying decoupling between U.S. and China.
• CHIPS Act Gets a Shake-Up: Trump’s March 2025 executive order introduces oversight and potential delays via the U.S. Investment Accelerator, sparking debate over efficiency vs. disruption.
• Global Realignment Accelerates: Friend-shoring trends strengthen across Japan, the Netherlands, and the U.S., with critical projects facing both opportunity and skilled labor constraints.

Semiconductor Industry Snapshot

March Recap Highlights

• NVIDIA unveiled its Blackwell Ultra and Vera Rubin platforms, while Micron saw strong demand for high-bandwidth AI memory.
• Intel Investor sentiment improved on news of leadership changes and focus on next-gen 18A process.
• Despite geopolitical tensions, TSMC achieved milestones in its U.S. fab expansion.
• Caution from ASML reflected weaker demand in non-AI segments like automotive and industrial.
• Despite innovation, investor reactions were sensitive and sometimes muted across the board.

The semiconductor sector in April 2025 remains a case study in duality—booming innovation amid intensifying geopolitical friction. U.S. tariffs on Chinese semiconductors, originally rooted in Biden-era policies, are being reinforced and expanded, further fragmenting global chip ecosystems.

Meanwhile, the CHIPS and Science Act continues to shape domestic momentum, though a major shift occurred in March when President Trump signed an executive order establishing the U.S. Investment Accelerator. This agency is tasked with reviewing CHIPS Act awards for cost-efficiency and performance. While some see this as a streamlining opportunity, others warn of uncertainty and delays—especially at critical sites like TSMC Arizona and Samsung Texas.

Amid these developments, we’re also seeing broader diversification beyond AI. Micron’s memory investments are increasingly geared toward IoT, and Samsung’s logic production targets auto and industrial verticals. These moves reinforce the notion that semiconductor strength depends on more than AI growth alone.

Top Semiconductor Stories

Tariff Expansion Signals Strategic Pressure

Tariffs under the Section 301 framework are being applied more aggressively to semiconductors, reinforcing the divide between U.S. and Chinese chip ecosystems. History shows that companies like Intel and GlobalFoundries tend to weather these policy changes more smoothly than peers with deeper exposure to China. Investors are watching closely for signs of retaliation, including new material export restrictions from China.

CHIPS Act Oversight Reshapes Federal Funding

Following over $30 billion in announced CHIPS Act awards in 2024, the newly formed U.S. Investment Accelerator may renegotiate or reassess key projects. The aim: improve efficiency by loosening prior constraints like DEI and union stipulations. While this could unlock faster execution for some, it also raises questions about delay risks and private sector confidence. Watch for timeline updates on TSMC Arizona, Samsung Texas, and Micron’s memory plants in Idaho and New York.

Workforce Capacity Remains a Bottleneck

CHIPS Act-backed projects have created over 115,000 new jobs—but filling them is proving difficult. A majority of roles require four-year degrees, and technical workforce readiness is lagging. Companies like Micron and Intel are expanding training pipelines, but short-term challenges may delay project milestones.

Sector Headwinds & Tailwinds

What’s Working:

• Micron: Memory initiatives diversify beyond AI, with tailwinds from IoT and edge computing demand.
• Samsung: Strategic pivot into automotive logic chips aligns with long-term sectoral expansion.
• GlobalFoundries: U.S.-centric operations offer stability amid policy shifts.

What’s Challenged:

• TSMC: Oversight from the U.S. Investment Accelerator introduces potential delays to Arizona expansion.
• ON Semiconductor & Qorvo: Tariff-related exposure to China could drive near-term volatility.
• Workforce Readiness: Labor shortages may stall CHIPS Act implementation timelines.

Looking Ahead

Policy remains a powerful force shaping the sector. Upcoming decisions from the U.S. Investment Accelerator, further clarification on China’s potential countermeasures (e.g., gallium, antimony), and corporate strategy shifts around foundry partnerships will all influence how the semiconductor industry evolves this quarter.

We’ll continue tracking both innovation and policy—as each is now inseparable from the other in semiconductor investing.