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Investing.com -- With the potential introduction of section 232 tariffs, Bernstein has analyzed the U.S. supply and demand balance in analog and discrete semiconductors, focusing on the implications for major players including Texas Instruments (NASDAQ:TXN), Analog Devices (NASDAQ:ADI), Infineon (OTC:IFNNY) Technologies (ETR:IFXGn), and Renesas (TYO:6723).
The U.S. already holds a strong position in analog semiconductors. Bernstein estimates the country accounts for around 18% of global analog capacity, ranking second behind China, and slightly exceeding domestic demand at roughly 16%.
“Analog is the biggest market (~$80bn value in 2024), followed by discretes ($31bn) and MCU ($22bn),” the analysts said. In contrast, the U.S. has only 4% of global discrete capacity versus 11% demand, creating a modest shortfall in that segment.
“If the U.S. manages to bring more manufacturing of end applications onshore, the demand may increase further, but at the moment, there is not a big gap that would result in a large wave of capacity expansion of analog/discrete in the U.S.,” analysts led by David Dai said in a note.
Infineon and Renesas face the largest exposure risk to potential tariffs, given their relatively small U.S. production footprint. Infineon has virtually no significant U.S. capacity, while Renesas operates with mid-single-digit U.S. capacity against low-teens U.S. revenue.
Bernstein notes that “both companies can mitigate it by outsourcing production to U.S. foundries,” with Renesas already outsourcing 65% of its output compared with Infineon’s more limited approach.
“Infineon only outsources its MCU production, and all other products are in-house produced. The exact impact won’t be known until the official tariff is announced,” the note states.
In contrast, U.S.-based TXN, ADI, and even Netherlands-headquartered NXP (NASDAQ:NXPI) appear well positioned.
TXN operates nearly 80% of its front-end manufacturing in the U.S., compared with less than 40% U.S. revenue in 2024, leaving it with more than enough capacity to meet domestic needs.
ADI and NXP each maintain roughly 60% of internal manufacturing in the U.S. and outsource around 40%, providing flexibility to support their domestic sales if required.
Bernstein concludes that while any tariff move would be negative for non-U.S. analog suppliers—more so for Infineon than Renesas—the impact should be manageable.
U.S. suppliers, meanwhile, “are benefiting from the supply chain shifts and have sufficient capacity to support their U.S. demand, likely without the need for substantial further domestic capacity expansion.”