Nvidia (NVDA), TSMC (TSM), and other chip-related stocks experienced declines on Thursday in response to President Trump's announcement of reciprocal tariffs that would impact the semiconductor supply chain.

Nvidia stock saw a drop of more than 7.5%, while Advanced Micro Devices (AMD) witnessed its shares plummet by 8.9%. Broadcom (AVGO) also faced a decrease of over 10%, and Micron (MU), a supplier of memory chips for Nvidia's GPUs, fell by 16%.

TSMC, a Taiwanese contract chip manufacturer known for producing cutting-edge semiconductors for Nvidia and Apple (AAPL), also recorded a decline of over 7%.

Following the announcement made by Trump, stating the introduction of varying reciprocal tariffs effective April 9, the market reacted with uncertainty. The US is set to implement reciprocal tariff rates on imports from China and Taiwan, compounding the existing import taxes and increasing the total tariff rates substantially.

While the tariff news had a significant impact on chip-related stocks, Truist analyst William Stein suggested that AI chip companies like Nvidia may have a lesser impact due to the high demand for AI technologies.

Trump's mention of Taiwan as a major chip producer highlights the country's importance in the semiconductor market, particularly for firms like TSMC, known for producing advanced computer chips for American companies. This trade landscape may affect the import of servers equipped with Nvidia's chips, potentially leading to increased costs and reduced demand for AI chips.

Trade data indicates substantial imports of computers and related items from Taiwan and China, showing the significance of these tariffs on the tech supply chain moving forward.