China’s new import tariffs reportedly provide an exemption for US semiconductor companies which outsource their manufacturing to Taiwan, a notice by a Chinese semiconductor association showed.

Reuters reported US chip companies including Qualcomm and AMD which have their chips made by Taiwan Semiconductor Manufacturing Company (TSMC) will not face China’s new tariffs based on their country of origin, citing an information platform and forum for China-based chipmakers.

“For all integrated circuits, whether packaged or unpackaged, the declared country of origin for import customs purchases is the location of the wafer fabrication plant,” state-backed China Semiconductor Industry Association (CSIA) declared in a notice on its WeChat account, Reuters reported.

The forum for China-based chip companies noted silicon made by companies including Intel, Texas Instruments and ADI which operate their own US-based fabrication facilities, “may be classified as US origin and liable for tariff rates of 84 per cent or higher”.

Last week, China raised its tariffs on US imports to 125 per cent in retaliation for US President Donald Trump hiking duties on China-based goods to 144 per cent.

He Hui, semiconductor research director at Omdia, told Reuters the CSIA notices clarifies which US chips will be impacted by the tariffs, and “that some chips made in the US will still be taxed even if they are packaged in China”.