President Trump’s potential tariffs on semiconductors are stoking alarm within the technology sector as companies brace for the ripple effects across the industry and its competitive standing on a global stage.

The Trump administration launched an investigation this week into the effects on national security of importing semiconductor technology, just one day after the president hinted tariffs on semiconductors could be coming soon in his broader trade war.

Semiconductors power most of the technology products of today’s ecosystem and industry observers warned the cost could trickle down to consumers should Trump decide to impose an import tax on the chips or the products that host them.

“There’s going to be an immediate, short-term supply shock if the...prices of chips are increased as a direct result of tariffs,” said Sean Murphy, the executive vice president of policy for Information Technology Industry Council (ITI), a trade association.

“That’s going to have a ripple or cascading effect across the industry,” he added, “Chips go into everything we take for granted.”

It is still unclear how broad the semiconductor tariffs could be.

Commerce Secretary Howard Lutnick suggested earlier this week the tariff could apply to products with chips such as smartphones and computers, not just the chips themselves.

“Depending on how those different categories are defined, we’re talking about a very large swath of trade potentially and that could have a really profound effect on the economy,” Murphy said.

The tech sector was thrown for a loop over the weekend when

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