Musk, Shocked by Q1 Earnings Shock
Musk to 'Reduce DOGE-Related Activities Starting May'
Tesla's Reputation Damaged Due to Musk's Role in Government"

Elon Musk, CEO of Tesla, announced his decision to return to a more active leadership role at the company starting next month. The move follows growing criticism over his divided focus—balancing Tesla management with his involvement in the Trump administration’s Department of Government Efficiency (DOGE). Analysts view Musk's decision as a response to mounting concerns that Tesla has suffered due to his governmental obligations and diminishing influence within the administration.

Musk’s Government Exit Signals Strategic Pivot

Speaking on Tesla’s Q1 earnings call, Musk said, "The bulk of DOGE’s major work has been completed. Starting next month, I’ll significantly scale back the time I spend on government duties." While he did not confirm an official resignation date, Musk’s "special government employee" term is set to expire at the end of May.

“I’ll still likely dedicate one to two days a week to government matters, depending on what the President needs,” Musk clarified. “But my priority from May onward will be Tesla.”

Musk’s pivot follows Tesla’s disappointing Q1 results, released shortly before the call. The company reported $19.34 billion in revenue and $409 million in net income—down 9% and 71% year-over-year, respectively. Adjusted EPS came in at $0.27, well below analyst expectations of $0.39.

Political Fallout Weighs Heavily on Tesla

Industry analysts say Musk’s entanglement in government work has hurt Tesla’s brand. The Wall Street Journal noted that Musk’s leadership of DOGE—tasked with cutting federal agency budgets—has “tarnished Tesla’s reputation.” According to a CNBC poll, 47% of Americans now view Musk and Tesla negatively, while only 27% hold a favorable opinion.

Tesla has also been the target of widespread protests. Demonstrators have gathered at over 200 Tesla showrooms, some of which have been vandalized or even attacked. The FBI has launched a task force in response to the escalating incidents, yet public pressure continues, with activists urging investors to sell Tesla stock.

Internationally, Musk has faced criticism for appearing to meddle in foreign politics. His meetings with leaders of Germany's far-right AfD and public rebukes of U.K. Prime Minister Keir Starmer sparked outrage across Europe. Tesla’s European sales have plummeted as a result: according to JATO Dynamics, only 16,000 Tesla vehicles were sold across 25 European countries in February, a 44% drop year-over-year—the worst February sales performance in five years.

Cracks Show in White House Influence

Meanwhile, Musk’s influence within the Trump administration appears to be waning. According to The New York Times, his cost-cutting initiatives at federal agencies have stalled amid internal resistance. Moreover, Musk-backed conservative candidates in state elections have lost momentum, with his influence being questioned even among loyalists.

Legal trouble is also mounting. Several lawsuits have been filed against DOGE and Musk by fired federal workers, civil rights organizations, and unions. Plaintiffs argue that Musk, as an unelected official, has overstepped constitutional boundaries. Federal courts have already restricted DOGE’s access to sensitive government databases in some instances. Furthermore, whistleblowers from within DOGE have joined lawsuits, citing internal opposition to Musk’s leadership and decision-making.

Musk’s planned return to Tesla signals a course correction amid growing backlash. While he retains symbolic importance within the Trump administration, the billionaire entrepreneur appears ready to recalibrate his focus on salvaging Tesla’s declining market share and public image.

With pressure mounting from shareholders, consumers, and regulators alike, May could mark the beginning of a new chapter—not just for Tesla, but for Musk’s broader legacy as both an innovator and a political figure.

Samsung's Taylor Plant Virtually Complete, Mass Production Targeted for 2026
Contemplating Equipment Installation Timing Amid Potential Semiconductor Tariffs
USD 2.96 billion Foundry Loss Last Year, Deficit Expected Again This Year

In a time when global tech giants are under pressure to localize semiconductor production in the United States, Samsung Electronics finds itself at a crossroads. Despite nearing the completion of its state-of-the-art foundry in Taylor, Texas, the Korean tech titan is holding back on installing critical equipment. Mounting uncertainties around U.S. tariffs, soaring labor costs, and stagnant customer orders are casting a long shadow over what was once a bold step toward expanding its global manufacturing footprint. As rivals like TSMC push ahead with multibillion-dollar investments, only to suffer ongoing losses, Samsung’s cautious stance highlights the fragile economics of domestic chip production in America.

Tariff Threats Cloud Future of U.S. Foundry Operations

On April 22, industry sources confirmed that Samsung’s Taylor foundry was 99.6% complete—functionally finished and ready for the next phase. Despite earlier reports speculating that the plant’s operation might be delayed until 2027, Samsung dismissed those claims, asserting that mass production will commence by the end of next year. Still, sources suggest that both production volume and start dates remain flexible, likely hinging on shifts in market demand and incoming orders.

However, with the structural build complete, this should have been the moment to begin equipment installation in earnest. Instead, Samsung is treading cautiously. The company is weighing the potential impact of newly proposed tariffs on semiconductor equipment. These levies, part of the U.S. government’s broader plan to apply a minimum 25% tariff on strategic imports like semiconductors, could significantly inflate Samsung’s operating costs. Advanced machinery, such as EUV lithography systems from ASML in the Netherlands and front-end tools from Japan’s Tokyo Electron, are expected to be deployed at the facility—pending final decisions on tariff implications.

The policy shift gained momentum when President Donald Trump, on April 15, outlined his intention to tax strategic imports and hinted that semiconductor equipment would be included. A day earlier, the U.S. Department of Commerce launched an investigation into the national security implications of importing such items, signaling a hardline approach with limited room for negotiation.

Skyrocketing Labor Costs and Strategic Uncertainty

Beyond tariffs, Samsung is grappling with an equally thorny issue: the cost of hiring in the United States. With challenges in relocating experienced Korean staff, the company is ramping up local hiring efforts. That comes at a high price. Samsung Research America employees earn an average annual salary of USD 224,000—nearly three times the U.S. average. Additionally, Samsung faces stiff competition for talent from domestic rivals like Intel and TSMC. To remain competitive, the company is expanding welfare offerings such as housing and education support.

Meanwhile, the U.S. government continues to ramp up pressure on chipmakers. On March 31, President Trump signed an executive order creating the American Investment Accelerator within the Department of Commerce. This body will oversee the CHIPS Program Office (CPO) and expedite approval for companies investing over USD 1 billion domestically. While framed as a pro-investment move, analysts suspect it sets the stage for renegotiating subsidy agreements. Trump has repeatedly opposed the USD 52.7 billion semiconductor subsidy package, arguing that tariffs alone are enough to compel companies to build factories in the U.S.

TSMC appears to be responding to that pressure, committing an additional USD 100 billion to its U.S. expansion after a direct meeting between Trump and Chairman Mark Liu. Trump declared TSMC would be exempt from tariffs if it manufactures domestically. The Taiwanese giant has already increased its U.S. investment from USD 40 billion to USD 65 billion—and now totals USD 165 billion—yet the financial toll is mounting.

Samsung Faces Mounting Losses Amid Operational Setbacks

TSMC's financial struggles are stark. Its Arizona plant logged a loss of USD 440 million last year, and similar losses have plagued its bases in Kumamoto, Japan, and Dresden, Germany. But Samsung’s situation may be even more precarious. The Taylor plant has yet to secure firm customer orders. In September last year, many Korean staff dispatched to the U.S. began returning home. These employees had been tasked with overseeing construction, infrastructure, and technology deployment—but low yield rates on 4nm and 2nm processes led to a phased withdrawal. Equipment setup teams from partner firms have also pulled out.

Financial figures tell a sobering story. Samsung’s Foundry Division posted a staggering USD ~2.96 billion operating loss last year, double the previous year’s figure. Analysts anticipate another USD ~2.25 billion loss this year. Since Vice Chairman Jun Young-hyun assumed leadership of the semiconductor unit, the company has scaled back on capital spending. Notably, the investment plan for the Taylor facility has shrunk from USD 40 billion to USD 37 billion. With even the main production line at the Pyeongtaek campus facing equipment delays, Samsung’s leadership is cautiously approaching further U.S. investments.

"Against Chinese Display Company BOE and Seven Affiliates"
"Trade Secret Infringement Lawsuit Filed in U.S. Court"
"Allegations of Core Patent Infringement and Misappropriation of Technology and Talent"

The battle over OLED technology is intensifying. Samsung Display has escalated its legal offensive against BOE, China’s largest display manufacturer, accusing the rising rival of repeatedly infringing on its patented display technologies. While the courtroom clash has been simmering for years, a fresh lawsuit filed in Texas reveals Samsung's intention to strike back harder, reinforcing its zero-tolerance stance against what it sees as systematic technology misappropriation. The move not only deepens an already complex legal feud but signals potential ripples across the global supply chain, with major players like Apple caught in the middle.

Escalation in the Patent War: Samsung Targets BOE Again

On April 21, Samsung Display filed a new complaint with the U.S. District Court for the Eastern District of Texas, targeting BOE and seven of its affiliates. The South Korean display giant alleges that the companies unlawfully used its patented OLED technologies in popular smartphones, including the Nubia Z60 Ultra and Red Magic 9S Pro. These models, released in December 2023 and July 2023 respectively, feature 6.8-inch OLED screens supplied by BOE—panels Samsung claims were built using its proprietary technology.

Specifically, Samsung accuses BOE of infringing on four U.S. patents—US11574990, US11574991, US10439015, and US10013088—related to thin-film transistor (TFT) structures and thin-film encapsulation (TFE) cell structures, both critical in OLED production. In a statement, Samsung emphasized the need to pursue “damages and other remedies” in response to the “unlawful infringement” by BOE.

Legal Momentum: U.S. ITC Ruling Boosts Samsung’s Position

This latest suit adds to a series of ongoing legal disputes between the two firms. Samsung Display is currently pursuing three major intellectual property cases against BOE in the U.S. The saga began in December 2022, when Samsung filed a patent infringement claim with the U.S. International Trade Commission (ITC). In June 2023, it followed up with a separate suit in Texas related to iPhone OLED diamond pixel structures. Further action came in November 2023 and March 2025, when trade secret infringement cases were filed with both the ITC and the Texas court.

Last month, Samsung scored a critical victory when the ITC ruled in its favor, confirming that BOE, along with U.S. parts distributors Injured Gadget and Wholesale Gadget Parts, had violated three to four of Samsung’s patents. Although the commission declined to impose an import or sales ban on BOE products—citing limited domestic industry impact—the ruling validates Samsung’s claims after over two years of litigation.

In light of this momentum, Samsung’s newest lawsuit is seen as part of a strategic campaign to hold BOE fully accountable. The company is reportedly seeking compensatory and punitive damages, including pre- and post-judgment interest and up to triple damages.

Ripple Effects on the Global Supply Chain: Spotlight on Apple

The intensifying legal confrontation between Samsung and BOE carries serious implications for the global display supply chain. As BOE aggressively scales its presence in the OLED market, both companies have become key suppliers to Apple, one of the largest consumers of OLED panels. Apple relies on a multi-vendor procurement strategy, balancing supply between Samsung and BOE to meet its vast demand and mitigate potential disruptions.

This strategy provides Apple with a cushion should one supplier face setbacks, but the legal escalation raises concerns over broader industry vulnerabilities. Analysts warn that the case may test the resilience of global supply chains and accelerate efforts toward diversification and supply chain fortification.

However, immediate disruptions appear unlikely. Most OLED panels for 2025 smartphone production have already been manufactured and delivered. Apple, which typically begins mass production of new iPhones around July, is believed to have already secured the required components for its iPhone 17 series.

Breaking the Search Monopoly: Chrome in the Crosshairs
Google: “Market Dominance Measurement Is Ambiguous”
Ad Monopoly Loss Raises Likelihood of Corporate Breakup

As antitrust enforcement gains momentum in Washington, Google finds itself at the epicenter of a historic legal challenge. The U.S. Department of Justice (DOJ) is no longer limiting itself to fines or corrective measures—it is now advocating for structural change that could dismantle the very architecture of one of the world’s most powerful tech companies. At the heart of this action is Chrome, Google’s widely used browser, now framed not as a tool of convenience but as a vehicle of monopoly.

In a world where digital services are increasingly intertwined with artificial intelligence and national security, the battle over Chrome is more than a courtroom dispute—it may be a turning point for Big Tech.

Chrome in the Crosshairs: A Gateway Under Siege

On April 22, the DOJ launched a pivotal trial to pursue enforcement against Google’s monopolistic conduct in the search engine market. Central to its argument is the assertion that Google’s Chrome browser functions as a “key gateway to search,” structurally anchoring its dominance. The DOJ contends that separating Chrome from Google’s suite of services would open the door for competitors to access valuable search traffic and challenge the tech giant’s overwhelming market share.

The department’s concerns extend to artificial intelligence. DOJ attorney David Dahlquist warned that Google is beginning to replicate its past search strategies in the AI space through its flagship model, Gemini. These developments, he argued, signal an urgent need for preemptive intervention to prevent further consolidation of market power.

Google, however, has pushed back firmly. Its legal team, led by John Schmidtlein, argued that users can freely choose other browsers and search engines, calling the DOJ’s proposed remedies “a wish list for Google’s competitors.” The company insists that its market share is not a product of coercion, but of consumer preference—a point central to its defense against what it characterizes as overregulation.

Unraveling the Ecosystem: A Threat to Google’s Core

Beyond the immediate courtroom debate lies a broader concern: the potential destabilization of Google’s entire digital ecosystem. Chrome is more than just a browser—it is the linchpin of a tightly integrated structure linking Search, YouTube, Gmail, Google Drive, and Google Ads. Through Chrome, Google leverages user data, drives ad revenue, and deploys algorithmic personalization at scale.

The DOJ argues that this integration constitutes unfair self-preferencing. It points to barriers that make it difficult for users to change default search settings, and criticizes how Google’s unified account system effectively bundles search, ads, and shopping, limiting true consumer choice. While Google emphasizes openness and flexibility, the DOJ maintains that these are illusions masking structural manipulation.

In defense of its integrated platform, Google has appealed to national interest. Leanne Mulholland, Vice President of Regulatory Affairs, warned in an April 21 blog post that dismantling Chrome would harm American innovation during a critical period of AI competition with China. She highlighted the rise of Chinese AI firm DeepSeek as evidence that weakening Google’s capabilities could jeopardize the U.S. technological edge. Her message was clear: now is not the time to undermine a global leader in digital infrastructure.

A Breakup on the Horizon: Legal Precedent Builds

The possibility of a court-ordered breakup no longer seems remote. Industry analysts point to a recent ruling as a key inflection point. On April 17, a federal court in Virginia found Google guilty of anticompetitive behavior in the ad server and exchange markets. The court accepted the DOJ’s argument that Google engaged in exclusionary practices by signing large contracts with hardware makers like Samsung to pre-install its AI services—actions interpreted as intentional efforts to shut out competitors.

These findings reinforced the DOJ’s characterization of Google as a monopoly using “comprehensive self-preferencing and market control.” Although Google has announced plans to appeal, the court’s willingness to label the company as a monopolist sets the stage for further intervention.

If structural remedies are enforced, Google may be required to operate its most vital businesses— Search, YouTube, and its advertising network—as separate entities. This would mark an unprecedented reorganization of a modern tech giant. What began as a debate over browser defaults has now evolved into a challenge to Google’s entire profit model, raising fundamental questions about digital competition's future and corporate integration's limits.

Trump Urges Negotiations: “Tariffs on China Will Be Significantly Reduced”
Secretary Bessent: “U.S.-China Tariffs Are Unsustainable, Will Deescalate the Situation”
White House Hints at Progress: Trade Talks to Proceed at ‘Trump Speed’

U.S. President Donald Trump has begun efforts to pave the way for negotiations in the trade dispute with China. As he signals a conciliatory stance by suggesting that the high tariffs imposed on Chinese products may be lowered, attention is now focused on whether this move could break the deadlock and open a path toward renewed U.S.-China trade talks.

U.S. President Donald Trump suggested that steep tariffs imposed on Chinese goods could be significantly lowered through upcoming negotiations, signaling a potential thaw in the tense U.S.-China trade relationship. Speaking at a press briefing following the swearing-in of SEC Chairman Paul Atkins, Trump said, “We are getting along well with China,” and repeatedly emphasized that the current 145% tariff rate on Chinese imports would “not stay that high.”

Dual Messaging: Firm Rhetoric, Diplomatic Overtures

While Trump's comments maintained a tough exterior, analysts view the statement as a strategic double signal—projecting strength while leaving the door open for a negotiated resolution. "We will be very kind in negotiations," Trump said, before clarifying that although tariffs would drop substantially if an agreement is reached, they would not go down to zero. He also stated that in the absence of a deal, the U.S. would "set the terms."

Treasury Secretary Scott Bessent echoed the President’s sentiments at an investor conference, describing current U.S.-China trade tensions as unsustainable. “We are essentially embargoing each other,” Bessent said, adding that easing tensions would allow “the world and the markets to exhale.” White House spokesperson Caroline Leavitt confirmed that President Trump is preparing the stage for a new deal with China and said progress is moving “in the right direction.”

Trade experts interpret the administration's recent rhetoric as a prelude to formal negotiations. If talks begin, observers expect a starting point near the 54% tariff rate first imposed when Trump announced his “reciprocal tariff” initiative. Some analysts speculate that a bilateral summit between Trump and Chinese President Xi Jinping could be scheduled for June, coinciding with both leaders' birthdays—a symbolic move toward détente.

Japan Braces for Currency Intervention Accusations

Meanwhile, Japan is preparing to defend itself against potential U.S. allegations of currency manipulation. According to Nikkei Asia, Finance Minister Katsunobu Kato expressed willingness to discuss yen valuation with Treasury Secretary Bessent amid growing concern over U.S. pressure on Japan to strengthen the yen or raise interest rates.

Trump has long accused Japan of artificially weakening its currency to boost exports. On April 20, he posted on social media denouncing Japan’s value-added tax and export subsidies, listing currency manipulation among eight “non-tariff unfair practices.”

While currency issues weren’t officially discussed in a recent meeting between Japan’s economic minister and Secretary Bessent, market analysts warn that Trump may demand concessions in unrelated areas like monetary policy as part of broader trade talks aimed at reducing the U.S.-Japan trade deficit.

Malaysia Walks Diplomatic Tightrope Amid U.S.-China Tensions

Southeast Asian nations are also finding themselves in a difficult balancing act amid great-power rivalry. Malaysian Trade Minister Tengku Zafrul Abdul Aziz is leading a high-level delegation to Washington, where he plans to stress Malaysia’s “neutral facilitator” role in global supply chains. However, the U.S. is expected to pressure Malaysia to reduce economic dependence on China—a sensitive proposition.

Earlier this month, Trump imposed a 24% reciprocal tariff on most Malaysian imports, citing “unfair exploitation” of the U.S. economy. Minister Zafrul is expected to emphasize Malaysia’s value as a stable link between Asia and the U.S., but geopolitical experts warn that maintaining equal ties with both superpowers is becoming increasingly untenable.

Asrul Hadi Abdullah Sani, a political analyst, noted that ASEAN nations are facing a “dilemma where neither choice—U.S. or China—is ideal.” China has already issued a sharp warning against any ASEAN nation that enters into agreements clearly aimed at excluding China, vowing “decisive and reciprocal retaliation.”

Malaysia’s foreign policy now sits at a critical juncture. While Washington demands alignment, Beijing remains wary of regional coalitions siding with the U.S. This is particularly important given U.S. concerns about Chinese supply chains entering the American market via Malaysia, Vietnam, and Thailand.

As the 2+2 trade dialogue between the U.S. and Malaysia unfolds this week, all eyes are on how Malaysia navigates the escalating rivalry. Its success—or failure—in balancing relations with both economic giants may well serve as a litmus test for the broader diplomatic strategies of mid-sized nations caught in the crossfire of great-power competition.

"Korean Companies Caught in Crossfire of U.S.-China Tariff War"
"China Escalates 'Rare Earths Coercion'"
"LS-Vietnam and POSCO Rushing to Secure Alternative Markets in the U.S."

In a significant escalation of the ongoing U.S.-China strategic rivalry, the Chinese government has formally warned Korean manufacturers not to export products containing Chinese-origin rare earth elements to U.S. military contractors. The move signals China’s intent to assert control over its strategic mineral exports far beyond its borders, placing South Korean businesses in an increasingly precarious position between two global superpowers.

China Enforces “Third-Party Export Controls” for the First Time

April 24, 2025 (Seoul )— According to sources within Korea’s industrial sector, leading Korean power equipment manufacturers have received official notices from Beijing warning that any product made with Chinese-sourced heavy rare earths and sold to U.S. defense firms may result in sanctions. One letter urged companies to provide assurances that their products would not be supplied to the U.S. military, adding that violations could carry punitive consequences. Although the specific penalties remain undefined, industry insiders interpret the warnings as a clear message that China may cut off rare earth supply to violators.

This is the first known instance of China enforcing third-party export controls on rare earths—a tool traditionally employed by the West, particularly the United States, to prevent sensitive materials from reaching adversarial nations. The move comes in response to the U.S. decision earlier this month to impose steep tariffs on Chinese goods and to ban exports of rare earth elements like neodymium, dysprosium, and terbium to 27 U.S. defense firms, citing national security concerns.

A Korean government official confirmed that similar notices have likely been issued to firms in other sectors such as secondary batteries, displays, electric vehicles, aerospace, and medical devices—industries heavily reliant on Chinese strategic minerals.

Korean Industry Scrambles to Respond

For companies like LS Electric and POSCO International, which have been heavily reliant on China for rare earth imports, the warnings mark a major inflection point. LS Eco Energy announced it is working with the Vietnamese government to establish a localized supply chain to reduce dependency on China. The company also disclosed plans to hire additional personnel and set up a dedicated rare earth trading division.

POSCO International, meanwhile, is looking to the United States for alternative sourcing. It recently signed a memorandum of understanding with U.S. firm Energy Fuels to procure neodymium-praseodymium (NdPr) oxide for use in electric vehicle motor cores. If sample tests prove successful, a long-term supply agreement is expected to follow. POSCO is also in discussions with California-based Rare Element Resources to explore further sourcing options.

Recognizing the systemic vulnerability, South Korea’s government has increased its strategic rare earth stockpile from six months to 18 months. Major manufacturers are also reportedly stockpiling rare earths to cover three to six months of production, aiming to cushion any immediate shocks.

R&D and Recycling Gaining Momentum

Efforts to develop rare earth recycling and substitution technologies are also underway. Hyundai and Kia have partnered with seven universities to operate a joint research lab focused on alternative materials and extraction techniques over the next three years.

As the geopolitical tug-of-war over high-tech supply chains escalates, Korean firms are being forced to make strategic calculations that could redefine their global production networks. With China leveraging its dominance in rare earths and the U.S. tightening export restrictions on semiconductors and advanced technologies, South Korea now finds itself on the front line of a deepening technological and economic divide.

The timing of China’s warning—just before a scheduled April 24 U.S.-Korea "2+2" trade dialogue—places further pressure on Seoul to clarify its strategic alignment. According to ING, if the current 46% U.S. tariff on Vietnamese exports persists and China maintains rare earth controls, Vietnam’s GDP could drop by up to 5.5%. For Korea, the implications may be even broader, affecting everything from industrial competitiveness to national security.

Amid an increasingly fragmented global trade environment, the ability of Korean firms to adapt swiftly—diversifying suppliers, investing in domestic capabilities, and leveraging diplomatic channels—will be critical in safeguarding their role in the next-generation industrial ecosystem.

Half of Samsung Galaxy Devices Are Manufactured in Vietnam
Apparel Companies Like Hansae Feeling Growing Pressure
Caught Between U.S. and China, Business Uncertainty in Vietnam Escalates

Vietnam—once seen as the next-generation production hub for South Korea’s smartphone, electronics, and apparel companies seeking lower labor costs—has been hit with tariffs as high as 46%, sending shockwaves through the domestic industry. While some companies are responding by increasing production in the U.S. or adjusting output by region, the significant prior investment in Vietnam means that any shift in strategy will take considerable time and resources to implement.

Vietnam-Based Korean Giants Scramble as U.S. Slaps Harsh Tariffs

Samsung, LG, and other Korean manufacturers face mounting pressure as the United States imposes punitive tariffs of up to 46% on Vietnamese-made products. Once seen as a low-cost production haven, Vietnam—home to more than 2,600 Korean companies—is now at the center of a trade storm that threatens the global manufacturing strategies of South Korea’s largest exporters.

Samsung Electronics, which entered Vietnam in 1989, has poured billions of dollars into building a manufacturing hub outside China. Today, the company produces nearly 60% of its annual 220 million smartphone units in Vietnam—many of which are destined for the United States, its second-largest market.

But the Trump administration’s new tariffs on Vietnamese goods—up to 46%—have cast a shadow over Samsung’s reliance on the country. While a temporary freeze sets the rate at 10% until July, market analysts warn that if the full tariffs are enacted, Samsung’s profitability could be severely affected. While semiconductor components have largely escaped tariffs, finished goods like smartphones and refrigerators haven’t.

“Assuming all Samsung smartphones shipped to the U.S. are produced in Vietnam, the MX division’s operating profit margin would fall from 9% to 3%,” said Chae Min-sook, an analyst at Korea Investment & Securities. She added, “If Apple is again exempt from tariffs as it was in Trump’s first term, Samsung could struggle to raise prices and lose market share.”

Garment Industry Feels the Squeeze

Korean apparel OEMs like Hansae and Youngone Corp., which relocated production from China to Vietnam during the U.S.-China trade war, are also in crisis mode. Vietnam accounts for 85% and 60% of their U.S.-bound exports, respectively. However, shifting production isn’t straightforward. “Cambodia and Bangladesh face similarly high reciprocal tariffs—49% and 37%, respectively—so there are no real alternatives,” a garment OEM official said.

The industry’s fears are compounded by falling U.S. consumer confidence. “Tariffs could increase prices and reduce demand, causing a second-order blow to producers,” said Daishin Securities analyst Yoo Jung-hyun.

Firms Operating in Vietnam Eye Onshore Production in the U.S.

Some companies are now considering a full-scale relocation to the U.S. Nancy Gail Daniels, COO of Hyosung TNS America, told reporters on April 17 that “relocating manufacturing to North Texas is one of the options.” The company is reviewing how to expand its ATM assembly line at its facility in Irving, Texas.

Daniels recalled how punitive tariffs had already cost them dearly: “We paid an additional $200,000 in tariffs on $100,000 worth of components due to a 174% tariff. We eventually had to return the goods—it was economically absurd.”

LG Electronics, which operates washing machine and automotive component plants in Hai Phong, Vietnam, is also reassessing its strategy. A company spokesperson said LG is prepared to absorb production at its Tennessee and Mexico facilities, which are currently exempt from the tariffs. Despite posting record Q1 earnings, LG has lowered its Q2 operating profit forecast by 6.5% due to the anticipated impact.

Still, some companies are holding off on relocating, hoping that diplomatic efforts may resolve the crisis. Vietnam is lobbying Washington aggressively. According to The New York Times, Vietnamese Communist Party Secretary General Trong Lam recently sent a letter to President Trump proposing a reduction of U.S. tariffs on Vietnamese goods to zero.

The stakes are high. ING estimates that if the 46% tariffs remain in place, Vietnam’s GDP could shrink by 5.5%.

TSMC Reports Losses at Its Arizona, Kumamoto, and Dresden Plants
Nanjing Facility in China Posts Record Profits for Third Straight Year
Despite Trump’s Tariff Pressure, TSMC Expands U.S. Investment to $100 Billion

Taiwan’s TSMC, which announced a USD 100 billion investment plan at the White House this past March and is set to invest a total of USD 165 billion in the U.S., reported a loss of over USD 460 million at its Arizona plant last year. In stark contrast, its Nanjing plant in China posted profits exceeding USD 810 million. The Nanjing facility primarily manufactures mature-node products at 28nm and above, underscoring the continued profitability of legacy chip production in China despite escalating geopolitical tensions.

TSMC’s Arizona Facility Posts Largest Loss Among Its Overseas Plants

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is facing growing financial strain from its overseas expansion. According to a report by Taiwan’s Economic Daily News on April 21, its Arizona plant recorded a staggering USD 460 million in losses in 2023, making it TSMC’s largest overseas loss to date.

TSMC began constructing its Arizona Fab 21 in 2020 with a USD 12 billion investment. Although the facility started 4nm chip production in Q4 2023, it's still hemorrhaging money. Analysts suggest that while 2024 marks the fab's full-scale ramp-up, the financial outlook remains uncertain—losses may persist due to high operating costs and ongoing capital expansion.

Other TSMC foreign sites have also posted negative returns, including the Kumamoto plant in Japan, operated by TSMC’s JASM subsidiary, which reported a record USD 136 million loss. The upcoming Dresden plant in Germany also remains unprofitable during its pre-operational phase.

In stark contrast, TSMC’s Nanjing facility in China—operational since 2018—continues to post record profits, with USD 804 million in earnings in 2023 alone. This plant has generated over USD 620 million annually for three consecutive years, underscoring its unmatched profitability in TSMC’s global portfolio.

Total U.S. Investment Reaches USD 165 Billion Including Existing Arizona Operations

Despite mounting losses, TSMC is doubling down on its U.S. presence. After a high-profile meeting with President Donald Trump at the White House last month, TSMC Chairman Mark Liu announced an additional USD 100 billion investment in the U.S. This includes: three fabs in Arizona, two advanced packaging plants, and an R&D center.

This is in addition to the USD 65 billion previously pledged, bringing total U.S. investment to USD 165 billion. Chairman Liu emphasized the role of the Trump administration, stating: “We initiated our U.S. investment in 2020 during President Trump’s first term. We support his vision and leadership.”

Trump reciprocated the praise, calling the deal “tremendous for America” and declaring that “some of the most powerful AI chips in the world will be made right here in the U.S. by TSMC.”

While the Biden administration had previously committed USD 6.6 billion in CHIPS Act subsidies for TSMC, Trump remains skeptical of such support. He argues that tariffs, not subsidies, are the best tool for driving foreign investment into the U.S. semiconductor industry.

During his confirmation hearing in January, Commerce Secretary Howard Lutnick, a Trump appointee, echoed this sentiment: “TSMC came here to avoid tariffs, not because of subsidies. That’s the power of Trump’s policy.”

Lutnick also indicated that CHIPS Act subsidies may be reviewed, casting doubt over future payments to TSMC, Samsung, and SK Hynix.

Trump Targets TSMC Just Four Days After Its Additional Investment Announcement

Remarkably, just four days after lauding TSMC’s expanded investment, Trump criticized the company, stating: “We could have easily protected our semiconductor industry, but now it’s almost entirely in Taiwan, with just a little in South Korea.”

The comments are seen as a tactic to pressure both Taiwan and South Korea into deeper commitments to U.S. manufacturing.

Despite Trump’s shifting tone, TSMC continues to tread carefully, balancing U.S. geopolitical alignment with the profitability of its Chinese operations. With over 60% of global AI chip demand coming from U.S.-based tech firms, TSMC has little choice but to follow Washington’s lead—even at the cost of short-term profitability.

As the U.S. tightened restrictions on AI chip exports to China in late 2024, TSMC preemptively halted shipments to Huawei. Yet, the company admits that fully preventing its chips from reaching blacklisted Chinese firms is practically impossible—an implicit acknowledgment of the limits of U.S. export controls.

TSMC’s strategy now involves spreading its production risks while managing political fallout: aligning with U.S. national security demands, particularly on AI and advanced chips; maintaining profitable Chinese operations in legacy nodes (e.g., 28nm) that remain unaffected by bans; and navigating subsidy uncertainty and tariff threats while ramping up costly U.S. facilities.

TSMC’s Arizona fab may be bleeding billions, but its expanded $165 billion commitment signals a long-term bet on the U.S. market—and on staying in Washington’s good graces amid the tech cold war.

Whether the company can balance political demands with financial sustainability remains to be seen. But for now, TSMC is paying the price of global leadership in the semiconductor supply chain.