Texas Instruments (TXN) stock plummeted 9.46% in pre-market trading on Friday, following reports of China's new retaliatory tariff policy that specifically targets US-based semiconductor manufacturers. The policy, announced by the state-backed China Semiconductor Industry Association, could significantly impact Texas Instruments' business in the world's second-largest economy.

According to Reuters, China plans to impose hefty tariffs of 84% or higher on chips made by companies that own and operate US-based fabrication plants. This move directly affects Texas Instruments, along with other major players like Intel, Analog Devices, and ON Semiconductor. In contrast, US chipmakers that outsource manufacturing to other countries, such as Qualcomm and AMD, will be exempt from these tariffs, as their products will be classified based on the manufacturing location rather than the company's origin.

The sharp decline in Texas Instruments' stock price reflects investors' concerns about the potential impact on the company's revenue and market share in China. As trade tensions between the US and China continue to escalate, this targeted approach to tariffs could reshape the competitive landscape in the global semiconductor industry, potentially forcing US-based manufacturers to reconsider their production strategies or risk losing ground in the crucial Chinese market.