Reuters : US chipmakers outsourcing manufacturing will escape China's tariffs

US chipmakers outsourcing manufacturing will escape China's tariffs

BEIJING, April 11 (Reuters) - U.S. chipmakers which outsource manufacturing will be exempt from China's retaliatory tariffs on U.S. imports, according to a notice by the main Chinese semiconductor association on Friday.

Given the highly specialized and multi-country nature of chip supply chains, there was uncertainty within the industry about how tariffs would be applied to chip imports.

"For all integrated circuits, whether packaged or unpackaged, the declared country of origin for import customs purchases is the location of the wafer fabrication plant," the state-backed China Semiconductor Industry Association (CSIA), which represents the country's largest chip companies, said in an "urgent notice" on its WeChat account.

For U.S. chip designers such as Qualcomm and AMD that outsource manufacturing to Taiwanese chipmaking giant TSMC, Chinese customs authorities will classify these chips' place of origin as Taiwan, according to EETop, an information platform and forum for Chinese chipmakers.

This means China-based companies importing their chips will not be forced to pay China's retaliatory tariffs on U.S. imports, EETop said on its WeChat account.

"In contrast, chips made by...Intel, Texas Instruments, ADI, and ON Semiconductor - which operate their own U.S.-based fabs - may be classified as U.S. origin and be liable for tariff rates of 84% or higher," it added.


Beijing on Friday increased its tariffs on U.S. imports to 125%, hitting back against U.S. President Donald Trump's decision to hike duties on Chinese goods to 145%. EETop's analysis was published on Friday before Beijing's latest tariff hike.

After CSIA's clarification, the prospect of high tariffs on U.S.-origin chips led to a surge in Chinese chipmakers' shares on Friday.

"The notice from CSIA helps distinguish which U.S. chips will be hit with tariffs," said He Hui, semiconductor research director at tech research company Omdia, "It is clear that some chips made in the U.S. will still be taxed even if they are packaged in China."
He added that this could benefit China's domestic chipmaking and its supply chains as foreign semiconductor firms pursue a "China for China" strategy - manufacturing for the Chinese market in China.

>>> Wells Fargo beats by $0.16, misses on revs (63.11)

Wells Fargo beats by $0.16, misses on revs (63.11)
  • Reports Q1 (Mar) earnings of $1.39 per share, $0.16 better than the FactSet Consensus of $1.23; revenues fell 3.4% year/year to $20.15 bln vs the $20.72 bln FactSet Consensus.
    • Provision for credit losses in first quarter 2025 included a decrease in the allowance for credit losses, reflecting a lower allowance for commercial real estate loans on lower loan balances, partially offset by a higher allowance for commercial and industrial loans.
  • 2025 Outlook
    • Net Interest Income - Wells Fargo expects 2025 net interest income to rise ~1% to 3% versus 2024, unchanged from prior guidance.
      • This forecast is subject to multiple factors including:
        • Interest rate levels and the shape of the yield curve
        • Deposit balances, mix, and pricing
        • Loan demand
    • Noninterest Expense: Expected to be ~$54.2 billion for full-year 2025, also unchanged from prior guidance.

>>> JPMorgan Chase beats by $0.44, beats on revs; provides FY25 guidance (227.11

JPMorgan Chase beats by $0.44, beats on revs; provides FY25 guidance (227.11)
  • Reports Q1 (Mar) earnings of $5.07 per share, $0.44 better than the FactSet Consensus of $4.63; reported revenues rose 8.0% year/year to $45.3 bln vs the $43.99 bln FactSet Consensus.
  • Net interest income excluding Markets was $22.6 billion, down 2%, driven by the impact of lower rates and deposit margin compression as well as lower deposit balances in CCB. These were predominantly offset by higher revolving balances in Card Services, the impact of securities activity including activity in prior quarters, as well as higher wholesale deposit balances.
  • Average loans up 1% YoY, down 1% QoQ; Card Services net charge-off rate of 3.58%
  • The provision for credit losses was $3.3 billion. Net charge-offs were $2.3 billion, up $376 million, predominantly driven by Card Services. The net reserve build of $973 million included $549 million in Wholesale and $441 million in Consumer and was largely driven by changes in the weighted-average macroeconomic outlook. The prior-year provision was $1.9 billion, net charge-offs were $2.0 billion and the net reserve release was $72 million.
  • CEO Jamie Dimon "This quarter, we repurchased $7 billion of common stock and announced a 12% increase in the common dividend. The increase in capital return was supported by our strong earnings generation and elevated capital levels. That being said, we continue to believe it is prudent to maintain excess capital and ample liquidity in this environment -- our CET1 ratio remained very strong at 15.4%, and we have an extraordinary amount of liquidity, with $1.5 trillion of cash and marketable securities." Dimon added: "The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and "trade wars," ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility. As always, we hope for the best but prepare the Firm for a wide range of scenarios." Dimon concluded: "We remain committed to serving our clients and communities, which include consumers, small and large-sized businesses, schools, cities, states and countries, across all environments. And our fortress balance sheet enables the Firm to be a pillar of strength, particularly during volatile or challenging times."
  • Guidance: Expect FY2025 net interest income of ~$94 bln, market dependent. Expect FY2025 net interest income excluding Markets of ~$90 bln, market dependent. Expect FY2025 adjusted expense of ~$95 bln, market dependent. Expect FY2025 Card Services NCO rate of ~3.6%.

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • CERT +20.9%, RXRX +19.5%, TARA +6.7%, ARGX +5.1%, CRL +2.2%, ULCC +2.2%, YRD +2%, ADC +1.4%, BP +1.4%, QGEN +1.3%, BLK +1.3%, SMG +1.2%, LCID +1.2%, LLY +1.1%, AGX +1.1%, TRGP +1%, QQQ +1%, SPY +0.9%, IWM +0.9%, DIA +0.8%
  • Gapping down:
    • STLA -2.4%, THS -2.4%, FRT -0.9%, RRC -0.8%, ALSN -0.7%

>>> Minneapolis Fed President Neel Kashkari (not a voting FOMC member) CNBC inte

Minneapolis Fed President Neel Kashkari (not a voting FOMC member) CNBC interview: Fed's first priority will be to make sure long run inflation expectations are anchored
Mr. Kashkari said:
  • Paying close attention to the bond market.
  • He is not seeing evidence yet that long run inflation expectations are climbing.
  • If investors decide they want to invest overseas, that will push up yields.
  • Dollar going down might indicate the preference of investors is shifting.
  • The US is "quite a ways away" from having any problems with financial system.
  • Tariffs are still high, despite pause. Inflation should rise in the short term.
  • Fed will take care of the inflation site before worrying about the employment side.
  • Fed's first priority will be to make sure long run inflation expectations are anchored.

>>> What to look at today - 11th of April 2025

The dollar extended losses after its biggest plunge in three years while stocks and bonds sold off as a worsening global trade war eroded an already fragile appetite for risk.  A gauge of Asian stocks was on track for its third consecutive week of declines as market relief turned to angst after the White House clarified US tariffs on China rose to 145%. US Treasuries extended the week’s slide. In a sign investors are seeking havens and non-US alternatives, the euro soared as much as 1.6%, the yen strengthened and gold set a new high. Equity-index futures for Europe inched up while those for the US fluctuated. Just a day after financial markets cheered President Donald Trump’s decision to delay some of his sweeping tariffs, the selloff suggested skepticism about the planned talks with US trade partners and fear of escalating tensions with China. The much-vaunted America-first trade — buying up assets that win when the US outperforms the rest of the world — is reversing on concern that the steepest increase in levies in a century will push the world’s biggest economy into a recession. The currency weakness extended into Asian trading Friday, after the Bloomberg Dollar Spot Index closed down 1.5% at the end of trading in New York Thursday. The options premium paid to hedge a dollar decline versus a basket of peers over the next week reached the highest since March of 2020, relative to positioning for gains. Even emerging market currencies such as the Korean won and the Thai baht rallied against the dollar. A gauge of EM currencies rose about 0.6%, on pace for its best day since August. Gains for the yen pushed the Japanese currency to around 143 per dollar on Friday, a level not seen since October. The Swiss franc touched the highest level in a decade. Shares in China and Hong Kong were mixed on Friday after they gained in the prior session on expectations the government will come out with more economic stimulus. The country’s top leaders were due to meet in Beijing Thursday to discuss the measures.  News of the higher levy on Chinese goods appeared to outweigh signals from Trump that the US is close to a first deal on tariffs, without naming the country. China is likely to defy expectations from some on Wall Street of big yuan devaluations against the dollar, opting instead to only moderately weaken the managed currency, according to Allan von Mehren, the chief analyst at Danske Bank. The nation’s daily reference rate for the yuan edged slightly up on Friday, after weakening for six straight sessions, amid the dollar’s losses. As Trump unleashes an all-out assault on global trade, the status of US Treasury bonds as the world’s safe haven is increasingly coming into question. Yields, especially on longer-term debt, have surged in recent days while the dollar has plunged. US government debt resumed a selloff from earlier in the week even as a solid US sale of 30-year Treasuries signaled appetite for bonds. On Friday, the 10-year Treasury yield rose as much as six basis points, adding to the nine on Thursday. The worsening tariffs spat is already affecting corporations. Audi has suspended deliveries to the US and the bigger-than-expected import tax has also prompted Japan’s Nintendo Co. to delay pre-orders for its long-awaited Switch 2 gaming console. From Ray-Bans to wigs, US buyers may see unexpected price rises. Retailer Five Below Inc. has asked vendors to turn away products waiting for shipment in China before they set off for the US. In commodities, oil headed for a second weekly loss, while gold extended gains. US After Hours CERT +23.3% and RXRX +22.4% on FDA plans to phase out animal testing; ARGX +8.7% higher on FDA approval

Nikkei -3.36% Hang Seng +1.89% CSI +0.167% Shanghai +0.77% Shenzen +1.51%

Eur$ 1.1301 CNH 7.3231 CNY 7.3202 JPY 143.32 GBP 1.3016 CHF 0.8206 RUB 83.5586 TRY 38.0423 WTI$ 60.18 +0.18% Gold 3,217 +1.29% BTC 80,760 +1.12% ETH 1,550 +1.30%

S&P +0.58% Nasdaq +0.70% EuroStoxx +0.97% FTSE +0.70% Dax 1.01% SMI +1%

Macro :
- EU Must Continue to Work on Tariff Countermeasures, Macron Says
- Hedge Funds Boost Net Leverage at Record Pace After Trump Pause
- EPA to Scale Back US Emissions Reporting, ProPublica Says (1)
- Bitcoin’s Link to Equities Recouples While Markets Turn Lower
- Lavazza CEO Sees Coffee Sales Falling Further in 2025: FT
- China’s auto parts makers like CATL, Gotion seen as biggest victims of tariff war
- YEN EXTENDS GAINS TO 1% VS DOLLAR AS TARIFF CONCERNS DEEPEN
- Bitcoin’s Link to Equities Recouples While Markets Turn Lower
- CEA’s Miran Says Didn’t Think US Headed for Meaningful Recession
- Portugal Plans to Reach 2% Defense Spending Target Earlier
- US, Iranian Negotiators Prepare for First Nuclear Talks in Years

Keep an eye on :
- BABA US : Alibaba’s Jack Ma Wants AI to Serve, Not Lord Over, Humans
- ALV GY : Jubilee Allianz Uganda, Sanlam Insurance Unit Plan Merger
- ATRLJB SS : Atrium Ljungberg 1Q Rental Income Meets Estimates
- BMW GY : BMW Considers Boosting US Plant Output in Response to Tariffs
- BOSN SW : Bossard 1Q Sales CHF283.9M Vs. CHF257.4M Y/y
- BZU IM : Buzzi Unit Raises Gulf Cement Offer to AED0.75/Share
- CAP FP : Capgemini Is Said to Be in Advanced Talks to Acquire WNS
- 1211 HK : BYD, China EV Peers Advance on EU Tariff Discussion Report
- CPRI US : Capri Flips to Net Cash From Net Debt on Versace Sale, BMO Says
- EPR NO : Europris Falls Most in Year After Posting Surprise 1Q Loss
- EXO NA : Agnelli’s Exor to Appoint ING Chairman Karl Guha for Board
- FRA GY : Fraport March Frankfurt Airport Passengers +0.3%
- GXI GY : Gerresheimer 1Q Plastics and Devices Adj. Ebitda Meets Estimates
- GOOGL US : Google Lays Off Hundreds of Employees in Android, Pixel Group
- HABA GY : Hamborner REIT Cuts Payout Ratio to 60%-70% on Cost Increase
- HAVAS NA : Havas NV 1Q Organic Net Revenue +2.1%
- MBTN SW : Meyer Burger Prelim FY Ebitda Loss CHF210.4M
- MRL SM : Vukile Buys Forum Madeira Shopping Center for €63.3m
- MSFT US : OpenAI Cuts Time, Resources Spent on AI Model Safety Testing: FT
- MOWI NO : Mowi Prelim 1Q Ebit About EU214M, Est. EU250.2M
- NOVN SW ; Novartis to Invest $23b in US-Based Infrastructure in 5 Yrs
- 1913 HK : Prada Buys Versace for $1.38 Billion to Form Italy Luxury Leader
- Quantum Systems : Thiel-Backed Drone Maker Quantum Systems Eyes €100 Million Round
- RUI FP : Rubis Says Molis Concert Holds 9.37% of Shares
- SRG IM : Italy May Nominate Scornajenchi as New Snam CEO: Corriere
- STLA IM : Stellantis 1Q Consolidated Shipment Ests of 1.2M Units, -9% Y/Y
- 4XO GY : Steyr Motors Holder Mutares Offers Up to 1m Shares: Terms
- TRYG DC : Tryg 1Q Combined Ratio Reported Beats Estimates
- UBSGN SW : UBS Hires Raine as Americas Media and Telecom M&A Head: Reuters
- VAR NO : Var Energi Expects to Reach Mid-Point of FY Production Guidance
- WNS US : Capgemini Is Said to Be in Advanced Talks to Acquire WNS
- ZURN SW : Zurich Airport March Passenger Traffic +0.6%

>>> Europe : Brokers Upgrades & Downgrades - 11th of April 2025

>>> Up
* CA Immo Raised to Buy at Erste Group; PT 28 euros
* Europris Raised to Buy at Arctic Securities; PT 85 kroner
* Fresnillo Raised to Add at Peel Hunt; PT 1,010 pence
* Hexagon Raised to Accumulate at Inderes; PT 100 kronor
* Hilton Food Raised to Buy at Investec; PT 940 pence
* Magyar Telekom Raised to Buy at Erste Group; PT 1,940 forint
* K+S Raised to Hold at Stifel; PT 14.50 euros
* Raiffeisen Raised to Buy at Erste Group; PT 29 euros
* Vale ADRs Raised to Buy at BofA on ‘Discounted’ Valuation (1)

>>> Down
* Chevron Cut to Sector Perform at Scotiabank; PT $143
* Coty Cut to Neutral at BNPP Exane; PT $5.65
* Detection Tech Oy Cut to Accumulate at Inderes; PT 15 euros
* HelloFresh Cut to Neutral at JPMorgan; PT 9 euros
* Occidental Cut to Sector Perform at Scotiabank; PT $40
* Snam Cut to Sell at Citi; PT 4.30 euros

>>> Initiation
* Cellectis Reinstated Outperform at Oddo BHF; PT 6.50 euros
* Clerhp Estructuras Rated New Buy at JB Capital Markets
* Elia Group Rated New Outperform at Grupo Santander; PT 98 euros
* JTC PLC Rated New Overweight at Barclays; PT 1,120 pence
* TSMC ADRs Rated New Buy at BNP Paribas; PT $223
* Wilmington Rated New Buy at Berenberg; PT 460 pence

>>> Call
* Capri Flips to Net Cash From Net Debt on Versace Sale, BMO Says
* Goldman Strategists See Equity Drawdown Risks Still Elevated
* Richter Raised to Buy as HSBC Sees Better Long-Term Growth Path

>>> TradeGate Pre-Market Indications

DAX:
  • Siemens Energy (ENR TH) +2.5%
  • Infineon (IFX TH) +1.9%
  • Airbus (AIR TH) +1.9%
  • Daimler Truck (DTG TH) +1.7%
  • Mercedes (MBG TH) +1.7%
MDAX:
  • Gerresheimer (GXI TH) +3.9%
    • Gerresheimer 1Q Adjusted Ebitda EU91.5M
  • Puma (PUM TH) +2.5%
  • Jenoptik (JEN TH) +2.2%
  • Evotec SE (EVT TH) +2.2%
  • K+S (SDF TH) +2%
    • K+S Raised to Hold at Stifel; PT 14.50 euros
  • HelloFresh (HFG TH) -1.8%
    • HelloFresh Cut to Neutral at JPMorgan; PT 9 euros
SDAX:
  • Heidelberger Druck (HDD TH) +4.5%
  • Deutz (DEZ TH) +2.8%
  • Stabilus (STM TH) +2.8%
  • SGL (SGL TH) +2.7%
  • Schaeffler (SHA0 TH) +1.9%
  • LPKF (LPK TH) -2.2%