The United States has exempted semiconductor equipment manufactured in the EU from a 15% tariff.

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Industry News

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2025-07-31

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On July 27, 2025, US President Trump and European Commission President von der Leyen reached a new trade agreement. Under the agreement, the US will impose a 15% tariff on most goods from the EU, significantly lower than the previously threatened 30%. Simultaneously, the EU pledged an additional $600 billion investment in the US and the purchase of $750 billion worth of US energy products. Additionally, the agreement includes zero tariffs on some strategic goods, such as aircraft and their parts, certain chemicals, certain generics, semiconductor equipment, certain agricultural products, natural resources, and key raw materials.

This also means the US will continue to impose zero tariffs on European-made semiconductor equipment. This is good news for semiconductor manufacturers such as TSMC, Intel, Samsung, GlobalFoundries, and Texas Instruments, which are building fabs in the US; they will not have to pay an additional 15% tariff.

For example, ASML in the Netherlands is the world's largest lithography machine manufacturer. Its immersion-type DUV (ArF) systems for 7nm and below advanced processes cost an average of $89.615 million per unit (based on the company's Q2 2025 performance), while the price of a standard EUV lithography machine is approximately $265 million, depending on the configuration (based on the company's Q1 2025 financial report. Because the Q2 financial report includes both Low-NA EUV and High-NA EUV in the EUV system classification). If an additional 15% tariff were imposed, the costs of these systems would increase to $103 million and $305 million, respectively. In fact, the significant drop in the value of the dollar against the euro since early February has already made EU-manufactured fab tools more expensive for US semiconductor producers, so an additional 15% tariff would have a considerable impact.

Since each fab will require multiple ASML lithography systems, a 15% US tariff would mean an increase of hundreds of millions of dollars in lithography equipment procurement costs per fab. This would reduce the competitiveness of US semiconductor production globally, potentially hindering investment in US fabs, lowering profit margins for companies producing chips in the US, or forcing manufacturers to shift advanced process wafer fabrication back to Asia. The tariff exemption clause in the US-EU trade agreement preserves the cost-effectiveness of US fab expansion.

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