Close-up view of a semiconductor circuit board featuring a central microchip surrounded by various electronic components and intricate connections/FILE
US President Donald Trump is expected to unveil more sweeping tariffs on US imports - this time targeting semiconductors.
The tiny chips powering billions of electronic devices are integral to the global economy and, as such, markets and manufacturers will be watching closely to see what it might mean for the sector.
Tariffs are taxes charged on goods imported from other countries.
Here's a closer look at what semiconductors are and why Trump is eyeing fresh tariffs on them.
WHAT IS A SEMICONDUCTOR AND HOW ARE THEY USED?
Semiconductors, also sometimes referred to as microchips or integrated circuits, are made from tiny fragments of raw materials, such as silicon.
They are altered through a process called doping in order to sometimes conduct electricity and sometimes not.
It allows them to be used as electronic switches, speaking the binary language of 0s and 1s that underpins computing.
Semiconductors are used in devices such as smartphones and laptops, as well as in vehicles with electronic control systems, remote car keys, and sensors.
They are also in routers, switches, and communication infrastructures that form the backbone of the internet, enabling global connectivity.
When it comes to sustainability, they can be found in wind turbines and solar farms.
In healthcare, they are in medical devices and equipment as well as implantable technology, like pacemakers and insulin pumps.
WHO MAKES THEM?
The UK, the US, Europe and China rely heavily on Taiwan for semiconductors.
The country's Taiwan Semiconductor Manufacturing Company (TSMC) provides over half of the world's supply.
Among its customers are tech giants such as Nvidia, Apple and Microsoft.
As a result, TSMC has been caught up in so-called "chip wars" between the US and China. Samsung in South Korea is next biggest supplier after Taiwan's chip manufacturer.
WHY DOES TRUMP WANT TARIFFS ON SEMICONDUCTORS AND CHIPS?
One of the main aims of President Trump's "reciprocal tariffs" introduced in his second term has been to encourage firms to manufacture more products in the US.
But so far, semiconductors have been left out of the 10% blanket levies on all countries except China.
That may now be set to change, as he told reporters on Air Force One he would be announcing tariff rates for imported semiconductors during the next week.
"We want to make our chips and semiconductors and other things in our country," he said.
He and members of his administration have also cited national security concerns about microchips being produced or sourced from elsewhere, saying this would be explored in an upcoming probe.
"We are taking a look at semiconductors and the whole electronics supply chain in the upcoming National Security Tariff Investigations," he wrote on his platform Truth Social on 13 April.
He added that the US would not be "held hostage" by other countries such as China.
HOW COULD THE US MAKE MORE SEMICONDUCTORS?
The US has spent colossal sums of money in recent years to try and boost technology manufacturing on its shores.
Some companies, such as TSMC, have already boosted their US presence in response to previous legislation under the previous administration.
The US Chips Act incentivised firms to move chips manufacturing in the US in return for funding awards.
The US government committed $6.6 billion (£5 billion) in awards to TSMC after it built a factory in Arizona.
But production at the site has previously faced delays due to a shortage of skilled workers - something that may present a wider challenge to increasing US-based semiconductor manufacturing.
TSMC reportedly only resolved its staff shortage by bringing thousands of workers over from Taiwan.
WHY IS THE WORLD INVESTING SO MUCH IN SEMICONDUCTORS?
From phones and computers to cars and washing machines, almost every product with an on-off switch relies on the production of computer chips, also known as semiconductors.
It is an industry that has seen a lot of turbulence over the last few years. There's been disruption to supply chains during the pandemic and geopolitical tensions in Asia, where 90% of the world's most advanced chips originate.
David Moore, chief executive of Pragmatic Semiconductor, which is the largest semiconductor manufacturer in the UK, says the industry is going to need multiple types of semiconductors to solve "different kinds of problems" in the chip sector.
Most semiconductors are made using silicon, but his company is taking a different approach.
They are making flexible chips - they actually bend - at their plant in Durham, which can be used in wearable technology, clothing authentication, and even in parcel labels to track and trace items.
Rather than sitting on silicon wafer, Pragmatic's chips are built on a flexible thin film.
This approach results in chips that are cheaper and faster to manufacture than the standard silicon chip.
"If you take a standard silicon manufacturing facility, it's going to take multiple years and billions of dollars to make," Mr Moore said.
"Our fabrication plant can be 10 to 100 times cheaper depending on what you compare it with.
"In silicon, it will take three to six months to go from the start of the process all the way to a finished wafer product. For us, we can do that in less than 48 hours."
But it is no panacea. The flexible chip may be cheaper and quicker to make, but the advanced chips in phones, computers and other leading tech will still need the most advanced silicon-based computer chips.
In August 2022, the US government signed into law the US Chips Act, which pledged $52bn (£41bn) to boost domestic production of computer chips.
The European Union has its own project worth €43bn (£37bn).
On a smaller scale the UK has promised £1bn of investment in the sector.
Analysts says that the big chip manufacturers are responding to such government incentives.
Germany has seen a huge wave of investment. A Taiwanese semiconductor manufacturer has decided, together with three European headquartered companies, to invest €10bn in Dresden.
"We see that 80% of of global production is currently in Asia, the reliance on Asian countries means we really need to strengthen our resilience here in the EU," notes Hendrik Abma, director general of the European Semiconductor Industry Association.
"I think the realisation about the importance of semiconductors for industry here in Europe, for our technical development, has been underestimated in the past."
As well as Germany, Mr Abma notes that Belgium, Lithuania and the Czech Republic, have seen significant investments.
Meanwhile, Mr Moore predicts more diversification in how semiconductors are made and what they're used for.
"You go from tens of billions of connected things to hundreds of billions and trillions of connected things, ultimately you end up with that very challenging element of not being able to supply to it, and so alternative supplies in high volume are what are going to be required.
"And being able to provide those cost effectively and at scale - that's the big challenge."
