US Chip Stocks Climb as White House Eases Key Tariffs
The move exempts many domestic firms from a 25% tariff on imported components, easing cost pressures amid ongoing trade tensions.
A broad rally lifted US semiconductor stocks on Tuesday following a report that the White House has exempted many domestic firms from 25% tariffs on key imported components. The news assuaged investor concerns over supply chain costs and provided a fresh catalyst for a sector already benefiting from booming artificial intelligence demand.
The closely watched PHLX Semiconductor Index (SOX), which serves as a benchmark for the chip sector, climbed in early trading as investors reacted to the policy shift. The move is expected to directly reduce costs and logistical friction for US-based chip designers and manufacturers, potentially bolstering profit margins and improving their competitive footing against international rivals.
Leading chipmakers saw a positive, albeit mixed, reaction in the market. Shares of Intel Corporation (NASDAQ: INTC) rose 2.36% to $48.40. Advanced Micro Devices (NASDAQ: AMD) also ticked higher, gaining 0.31% to trade at $221.65. However, sector giant NVIDIA (NASDAQ: NVDA), despite its central role in the AI boom, traded down 1.87% to $182.33, suggesting some investors may be taking profits after the stock's historic run or weighing other company-specific factors.
The tariff exemptions represent a significant development for an industry that has consistently cited trade policy as a major headwind. According to a recent survey, industry leaders ranked tariffs and trade policy as their top concern, even ahead of talent shortages and labor issues. For years, chipmakers have navigated a complex and often unpredictable landscape of tariffs stemming from the US-China trade dispute, which added layers of cost and uncertainty to global supply chains.
This is not the first time the administration has used tariff policy to influence the industry. Previous actions included a memorandum in April 2025 that excluded certain electronics from tariffs to prevent price hikes on consumer goods. In August 2025, the White House also announced that companies investing in US-based manufacturing would be exempt from separate, steeper chip tariffs, a move designed to incentivize domestic production.
Tuesday's news provides further relief and reinforces a government strategy aimed at strengthening the US semiconductor ecosystem. By easing the financial burden on domestic firms that still rely on some overseas components, the policy aims to boost their resilience without undermining the broader push for onshoring advanced manufacturing.
The development comes as the semiconductor industry continues its strong performance, recently propelling the S&P 500 and the PHLX Semiconductor Index to record highs. While geopolitical tensions and trade remain a persistent risk, the powerful demand driven by the global build-out of AI infrastructure has provided a powerful tailwind. This latest tariff relief gives chipmakers more breathing room, allowing them to better capitalize on that demand.