On April 16, 2025, the Department of Commerce announced that it initiated an investigation on April 1, 2025, under Section 232 of the Trade Expansion Act, into imports of semiconductors, semiconductor manufacturing (SME), and related products to evaluate how those imports may impact national security. The investigation extends beyond standalone semiconductor components, reaching into the broader electronics supply chain. It includes finished products embedding semiconductors, such as smartphones, laptops, tablets, and similar devices. Based on the application of the Section 232 tariff on steel and aluminum derivatives, if any downstream products becomes covered by this Section 232 investigation, it is likely that importers will need to pay a duty for those finished products based on the value of the incorporated semiconductors. The scope of the investigation also covers various elements critical to the semiconductor industry, including semiconductor substrates, bare wafers, legacy chips, leading-edge chips, microelectronics, and SME components. The Department of Commerce is seeking public comments on several national security-related issues surrounding semiconductor imports: Demand and Production Capacity: Evaluating current and projected U.S. demand for semiconductors and SME by product type and node size, and assessing domestic production capacity to meet this demand. Foreign Dependence: Examining U.S. reliance on foreign sources for semiconductors and SMEs, and the impact of foreign subsidies or export restrictions. This also considers the risks associated with concentrated imports from a small number of foreign facilities. Domestic Expansion: Exploring the feasibility of expanding domestic production to reduce dependence on imports. This includes assessing strategies to enhance U.S. industry competitiveness and evaluating whether additional trade measures, such as tariffs or quotas, may be necessary to safeguard national security. The comment period is open for 21 days from publication, closing on May 7th, 2025. Interested parties may submit their written comments, data, analyses, or other relevant information through the Federal rulemaking portal at www.regulations.gov under docket ID BIS-2025-0021.

Who is Stacking the Chips: U.S. Commerce Department Launches Section 232 Investigation into Semiconductor Imports

The U.S. Department of Commerce initiated a Section 232 investigation on April 1, 2025, into semiconductor imports and related products to evaluate their impact on national security. The investigation covers semiconductors, substrates, bare wafers, and other components, with a focus on demand, production capacity, and foreign dependence. Public comments are sought until May 7, 2025.