Following Trump's announcement of reciprocal tariffs, nearly all non-US manufactured electronic products became subject to taxation, directly impacting the server electronics manufacturing services (EMS) sector. According to DIGITIMES, manufacturers located in countries with higher tax rates (Vietnam 46%, Thailand 36%, China 34%, Taiwan 32%) are significantly affected.
Among them, component manufacturers in China with lower profit margins, Taiwanese EMS companies that recently established new plants in Vietnam and Thailand, and general-purpose server EMS providers with a high concentration of low average selling price (ASP) deliveries face the greatest challenges.
DIGITIMES believes that once the reciprocal tariff rates are confirmed, server EMS operators must consider capacity reconfiguration in the short term. In addition to increasing assembly lines in the US, they may also explore configurations in countries like Singapore, where the reciprocal tariff rates are lower and the industrial chain is more complete
Shifts in US trade deficit items under ch. 84, 85 and 87 dominate 2024
Chart 1: Trade deficit items categorized by 2-digit HS code, 2024 (US$b)
AI boom fuels US trade deficit surge, chapter 84 dominates in 2024
Chart 4: Trump's tariff announcement creates three trade groups with different tax rates
Chart 5: US server trade deficit surges to US$17.2B, outpacing notebook and PC sectors
Chart 6: US server trade deficits by partner, 2019-2024 (US$b)
Chart 9 : Taiwanese manufacturers' server shipment trends and projections, 2020-2025
Chart 11: Hon Hai, Wistron, Quanta, and Inventec's server factory supply chain map in Europe
