The US and Taiwan reached a trade agreement on January 15, 2026 (US time), cutting reciprocal tariffs on most Taiwanese goods from 20% to 15% without stacking them onto existing most-favored-nation rates. Taiwan's Executive Yuan said semiconductors and related products will receive the most favorable treatment under Section 232 of the Trade Expansion Act. The pact also includes commitments on supply-chain investment and strategic cooperation in artificial intelligence.
South Korean industry and government officials are monitoring a new trade agreement between the US and Taiwan that links semiconductor investment to import duty exemptions, with officials in Seoul saying that any future US-South Korea talks should not leave Korea worse off than Taiwan. Officials view the terms as a potential benchmark for future US-South Korea trade negotiations.
Taiwan's Executive Yuan announced early Thursday that it had secured preferential tariff treatment from the United States on semiconductors and related products, marking a significant breakthrough in bilateral trade negotiations amid intensifying geopolitical and supply-chain pressures.
At its earnings call on January 15, 2026, TSMC signaled that its capital expenditures for 2026 will increase to US$52-56 billion, far exceeding market expectations. On top of demand for new capacity buildouts, the company also emphasized during the call that development costs for each new advanced process node have risen significantly compared to the previous generation. While TSMC stressed that it will not adopt opportunistic price hikes, it will continue to insist on earning the appropriate value for its technology.
The United States and Taiwan formalized a significant trade and investment agreement on January 15, 2026, establishing a new framework for bilateral economic relations.
The White House has finally released details regarding chip tariffs. Despite previous concerns, tariff rates and products included are relatively limited. The tariff rate has been set at 25%; chips imported for data centers, startups, technology R&D, maintenance and replacement, consumer applications, industrial control applications, as well as any chips used to build US industries, are all exempt from the tariffs.
The surge in artificial intelligence (AI) applications has pushed cloud service providers to increase capital expenditures on data centers, prompting major memory manufacturers to shift production towards high-margin, high-performance products such as HBM and DDR5. This strategic realignment has led to a sharp reduction in the supply of niche memory types, especially those used in network communication devices, exacerbating price hikes and supply shortages that are expected to impact Taiwanese vendors through the first half of 2026.
Taiwan's semiconductor materials sector delivered a mixed performance in December 2025, highlighting a widening gap between advanced and mature segments of the supply chain. Upstream silicon wafer suppliers showed signs of stabilization but not a full rebound, while regenerated wafers and advanced-process-related consumables outperformed. By contrast, traditional process materials such as photomasks remained under pressure, while packaging materials showed clear divergence in response to AI-driven demand.
TSMC used its earnings call for the fourth quarter of 2025 to deliver one of its most bullish outlooks in years, arguing that artificial intelligence (AI) is reshaping the semiconductor industry's growth trajectory rather than inflating a short-lived bubble.
SK Hynix plans to bring forward the opening of a new semiconductor factory by three months and will also begin operating another new plant in February 2026, as surging memory demand strains global supply, a senior executive told Reuters.
National Institutes of Applied Research (NIAR) chairman Cheng-wen Wu has called on the Electronic and Optoelectronic System Research Laboratories (EOSL) of the Industrial Technology Research Institute (ITRI) to take up the mantle and connect with the wafer-level and chip-level platforms at the NIAR's Taiwan Semiconductor Research Institute (TSRI).
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