Manufacturing Steady in April as Inflation and Iran War Weigh In

U.S. manufacturing activity expanded modestly in April, maintaining its fourth consecutive month of growth despite rising raw material costs and geopolitical tensions. The Institute for Supply Managem... Read original →

April’s stable U.S. PMI of 52.7% masks structural fragility: the Prices Index surging to 84.6% signals that Middle East tensions are inflating semiconductor input costs via energy and base metals. TSMC benefits from AI-driven demand, yet its 3nm EUV-intensive processes face acute supply chain vulnerability—any ASML shipment delay due to export controls or logistics snarls would directly impede NVIDIA’s next-gen AI infrastructure rollout. Compounding this, 31 consecutive months of manufacturing employment contraction threaten the skilled labor pool needed for advanced packaging scale-up. With firms pre-buying to hedge against tariffs and volatility, inventory risks mount. Over the next 12–24 months, despite CHIPS Act incentives, persistent inflation and geopolitical friction will push IDMs and fabless players to build ‘redundant capacity’ in Mexico, Vietnam, and Taiwan, China—ushering in a decentralized but not de-Chinaed supply chain paradigm.