Samsung & SK Hynix Dodge U.S. Tariff Bullet as South Korea Races to Negotiate

Trade tensions flare as Seoul scrambles to shield its semiconductor titans from Washington's tariff crosshairs.

The Chip Shield Strategy

South Korean officials are burning the midnight oil—diplomatic channels humming with urgency. This isn't about minor levies; it's a preemptive strike to protect the crown jewels of its tech economy. The global memory chip supply chain hangs in the balance, and Seoul knows it.

Behind Closed Doors

Talks are locked in. The agenda? Forging a path that keeps Samsung and SK Hynix's cutting-edge fabs humming without punitive U.S. duties slashing their margins. Expect hardball negotiations over production quotas, supply chain disclosures, and maybe a strategic 'friendshoring' promise or two. Classic geopolitics, dressed in a suit.

The Ripple Effect

Tariffs avoided today mean stability tomorrow—for everything from your next smartphone to the AI servers powering the future. A disruption here would send shockwaves through tech manufacturing, proving once again that in global trade, even giants walk a tightrope. Another reminder that in finance, the most valuable asset is sometimes a good lobbyist.

Trump order hits AI chips first, but more tariffs could follow

South Korea’s Trade Minister Yeo Han-koo said on Saturday that Trump’s new tariff plan mainly targets high-end artificial intelligence chips, not memory chips.

“While the government remains cautious at an early stage, the first-phase measures announced so far focus on advanced chips made by Nvidia and AMD,” he said. He pointed out that the memory chips South Korea usually exports are not included in this first phase, so the impact is “expected to be limited.”

But Yeo made it clear the government is not relaxed about the situation. “It is not yet time to be reassured,” he said, noting that no one knows how wide the next phase could be. He added that the government will keep working with local companies to secure the best possible deal for South Korea.

Trump signed the new tariff proclamation on Wednesday, claiming it’s about national security. It puts a 25% duty on AI chips like Nvidia’s H200 and AMD’s MI325X.

The WHITE House said the scope is “narrow,” and the tariffs won’t apply to chips imported for U.S. data centers, public sector uses, consumer electronics, startups, or civil industrial applications that don’t involve data centers.

Still, the fact sheet makes it clear that wider tariffs are on the table. The U.S. could expand this to include more types of chips and related products to push more domestic production. Basically, if chipmakers don’t build factories in the U.S., they could get taxed hard.

U.S. Commerce Secretary Howard Lutnick said that South Korean and Taiwanese chipmakers who aren’t investing in the U.S. could face tariffs as high as 100%.

“If you want to sell in America, you should build in America,” he said at the groundbreaking of Micron’s new plant in New York.

The new rules come after a nine-month investigation under Section 232 of the Trade Expansion Act of 1962. The investigation targeted advanced chips that meet certain performance levels and the gear built around them.

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