The semiconductor industry is aflutter with enthusiasm. It’s not just fiction, either — the Taiwan Semiconductor Manufacturing Company (TSMC) is accelerating the construction of another fabrication plant in Arizona. This action will greatly help increase the supply of chips produced right here in the United States. It gets right to the heart of the worries over our dependence on foreign manufacturing.

Yet, a heavy cloud of unpredictability hangs over the industry, due in part to the growing trade war between the U.S. and China. These tensions further complicate and risk upending a global semiconductor supply chain already facing major disruptions.

According to recent market data from CoinDesk, the cryptocurrency space has been on a rollercoaster ride with mixed performances. Further, Ether (ETH), the second-largest crypto by market cap, has plunged, down 47% in the last year. By comparison, the CoinDesk 20 index has jumped 14%. The CoinDesk Market Index serves as the industry’s primary benchmark for measuring the performance of the top 20 digital assets.

Hong Kong’s Bosera HashKey Ether exchange-traded fund (ETF) has been approved to provide staking services. Such a move would draw in a broader array of investors and add another level of legitimacy to the digital asset space.

All of this is complicated by China’s recent announcement of tariffs on semiconductors, which further spices the already highly charged global trade environment. These tariffs create a 34% tax on any chips of U.S. origin. They are determined on the basis of the chip’s fabrication location, not where that chip was designed at all.

Given that China considers the island of Taiwan, where all of TSMC’s fabs are located, its territory, this distinction would potentially work to completely exempt TSMC. The majority of U.S. chip firms from AMD to the embattled Nvidia don’t own or operate fabrication plants. They all rely on TSMC to manufacture their chips. This dependence puts them at risk for severe disruptions, due to the effects of the trade disputes still brewing around them.

The White House has previously singled out items such as smartphones, computers and the semiconductors that power them from tariffs. As a result, this relocation gave the industry a short reprieve. The long-term impact of such trade policy is unclear.

Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia. His background in crypto derivatives, DeFi, market microstructure, and protocol analysis provide invaluable context to the fast-changing digital asset environment.

"From our side, we believe there will be challenges to shift global supply chains away from China overnight and that low-end, low-margin manufacturing is most likely going to shift to other Asian countries after they broker trade deals. That being said, we do think that this rally looks temporary and that markets will continue to be volatile in the short term." - Jeff Mei

Shaurya, Co-Leader of the CoinDesk tokens and data team in Asia, focuses on crypto derivatives, DeFi, market microstructure, and protocol analysis, providing valuable insights into the evolving digital asset landscape.

"Even after Trump mentioned that they would simply be moving to another bucket of tariffs rather than exempted altogether, markets held their gain amidst rumors that business leaders were able to convince the Trump administration to peel back some of their highest tariffs." - Jeff Mei