US tariffs may cost chip equipment makers more than $1 billion, industry estimates

U.S. President Donald Trump's new tariffs may cost semiconductor equipment makers over $1 billion annually. This estimate comes from industry discussions with officials and lawmakers in Washington last week.

The three largest U.S. chip equipment makers are Applied Materials, Lam Research, and KLA. Each may lose about $350 million a year due to the tariffs. Smaller companies like Onto Innovation could face tens of millions in extra costs.

This potential billion-dollar impact on the chip equipment industry is reported for the first time. These companies produce highly sought-after chipmaking equipment that requires thousands of specialized parts.

Chip equipment makers have already lost billions in revenue. Former President Joe Biden implemented export controls to limit shipments of advanced semiconductor manufacturing equipment to China.

The Trump administration has paused reciprocal tariffs announced in April. However, it is considering new duties on the chip industry and started an import probe on Monday.

The estimated costs discussed last week include lost revenue from missed sales overseas. They also account for expenses related to finding alternative suppliers for complex components and tariff compliance costs.

Lawmakers and officials talked about these tariff costs with chip industry executives and SEMI representatives during ongoing discussions.

Applied Materials did not respond to requests for comment, while KLA and Lam Research declined to comment as well.

The initial estimate of $350 million per company may change as tariffs take effect. Calculating exact figures is difficult because each tool has many components, and the final tariff regime remains unclear.

Over three years, the Biden administration restricted China's chip industry to hinder its ability to produce advanced chips used in AI or military applications that threaten U.S. security.

These U.S. export controls have prompted China to invest more in its domestic chip equipment industry.