The mechanism. Every Section 301 and Section 232 tariff action, and every tightening of the de minimis exemption, taxes the same thing: a finished, assembled product crossing the U.S. border with a country-of-origin stamp. Servers, switches, and racks assembled in Taiwan, Vietnam, or Mexico for the U.S. market get hit at the box level under the Harmonized Tariff Schedule. USTR's Section 301 framework already runs 25% duties across multiple product lists, with fresh modification notices landing as recently as this year, and the direction of travel — higher rates, fewer exclusions, more "strategic sector" targeting — is unmistakable. That tariff bill lands on whoever's name is on the customs entry: the box-builder. It does not land on the company that licensed them the chip design.
Broadcom doesn't build boxes. Its AI franchise is overwhelmingly custom ASIC IP and networking silicon — Tomahawk and Jericho switch chips, and bespoke XPU designs co-developed with hyperscalers — sold or licensed to whoever does the assembling. The value Broadcom captures happens at the design and wafer level, largely routed through TSMC, before a single unit gets racked into a Dell chassis or a Supermicro server. Tariffs on assembled networking gear are a customs event for the assembler, not a royalty event for the IP licensor.