President Trump's threats to impose stricter tariffs on semiconductors are sending shockwaves across the market, raising concerns for major chip manufacturers like Micron Technology. KeyBanc Capital Markets equity research analyst John Vinh noted that such tariffs could have a significant impact on end-market demand for chips.
Vinh explained that tariffs targeting Mexico would affect the automotive industry, while those focused on China would impact consumer electronics such as PCs and smartphones. An increase in prices for these end products due to tariffs is expected to negatively affect overall demand, which would then flow upstream to chip companies.
The semiconductor industry currently lacks the flexibility to quickly shift production to the U.S. to circumvent these tariffs, according to Vinh. This situation presents a substantial geopolitical and regulatory risk for Micron, potentially disrupting supply chains and dampening demand in key market segments.
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