The reciprocal tariffs imposed by US President Trump are creating chaos around the world. There are concerns about the impact on the specialty gases  and related equipment that are used in semiconductor manufacturing.

     Direct targets could include gas supply equipment, such as mass flow controllers (MFCs), valves, and fittings for semiconductor manufacturing equipment, at major U.S. companies, such as Applied Materials (AMAT) and Lam Research (Lam), as well as fluorine-containing gases such as CF₄ exported to the United States. 

     Trump has included semiconductors as one of the areas for which he will consider new measures under Section 232 of the US Trade Expansion Act to encourage domestic manufacturing of such products. During April, a memorandum of understanding was announced on April 11th to exempt semiconductor-related products from reciprocal tariffs, but the future remains unclear as US policies change almost daily. 

     As for exporting semiconductor-related gases and equipment to China, western countries, Japan, and other countries were asked to ban exporting cutting-edge semiconductor manufacturing equipment to China last time, but the value of equipment for legacy semiconductors accounts for about half of the global market from the second half of 2024 to the first half of 2025, making China the largest consumer country. However, demand from China is expected to begin to fall by around 20% in the first half of 2025. It is unclear at this point whether this indicates an excess of infrastructure or whether companies are considering cutting back on production in light of the sharp increase in tariffs imposed by the US on China. However, SEMI also predicted that the Chinese market would shrink by the end of 2024, so this situation is not surprising.

     One thing that has already become an issue is the withdrawal and scaling back of data center projects. According to Bloomberg, Microsoft has halted consideration and postponed development of projects in Indonesia, the United Kingdom and Australia, as well as Illinois, North Dakota, and Wisconsin in the US.

     There are also reports of delays and postponements to the construction of data centers in Japan. This is said to be due to rising construction costs and labor shortages, but in addition to the reduced demand for AI applications such as Chat GPT , data centers around the world also consume huge amounts of electricity, making it difficult to secure the required power. Green electricity, including renewable energy sources such as solar and wind power, cannot meet that demand alone. In addition, the production of AI semiconductors also consumes large amounts of electricity. 

     The use of nuclear power has been suggested, but that would not be realistic in Japan, unless Japan were to follow China, which is building 16 new nuclear power plants as national policy. The best that Japan could do is to restart suspended nuclear power plants, but that would not be enough to catch up. The electricity problem is quite serious.

     The construction of new semiconductor factories is also beginning to be affected. The reasons are the same as those for data centers, but of course there is also the uncertainty about the future of reciprocal tariffs imposed by the Trump administration. It is inevitable that reciprocal tariffs will be reflected in semiconductor prices.

     The impact on semiconductor-related specialty gases  and gas supply equipment is yet unclear. However, 30% to 50% of Japan’s specialty gas  exports are destined for Taiwan, South Korea, and China, with only about 10 percent going to the US. In that sense, the impact of Trump’s tariffs is likely to be limited overall. On the other hand, there are concerns that exports to China may be subject to some type of restrictions.

     Due to Trump’s tariffs, the future of the semiconductor gas and equipment markets in 2025 is uncertain. 

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