South Korea would seek favorable terms for US tariffs on imports of memory chips, a presidential office spokesperson told a news conference yesterday.
The country last year released a joint fact sheet on its trade deal with the US that included terms ensuring South Korea would not receive unfavorable treatment from US tariffs on imported chips compared to key competitors, the official said, when asked about US President Donald Trump administration’s proclamation on imposing tariffs on artificial intelligence chips.
South Korean Minister of Trade, Industry and Resources Kim Jung-kwan on Saturday said US tariffs on some advanced computing chips would have a limited impact on South Korean companies.
Photo: Bloomberg
South Korea’s Samsung Electronics Co and SK Hynix Inc are among the world’s biggest producers of memory chips.
Under an accord with South Korea announced in July last year, the US would charge a 15 percent tariff on most goods from the country, while sparing, for now, imports of chips.
The agreement between Washington and Seoul includes a US$350 billion South Korean fund for US investments, yet those plans are still taking shape and it is unclear how much more Samsung and SK Hynix would agree to spend in the US beyond their earlier commitments.
Samsung in 2024 unveiled plans to invest more than US$40 billion in the US, including US$17 billion for an advanced packaging facility in Texas for high-bandwidth memory chips.
Meanwhile, SK Hynix has said it intends to spend nearly US$4 billion on advanced packaging in Indiana, part of US$15 billion for production and research in the US.
South Korean memory makers and Taiwanese companies that are not investing in the US could face up to 100 percent tariffs unless they commit to increased production on US soil, US Secretary of Commerce Howard Lutnick said.
Following a groundbreaking ceremony for a new Micron Technology Inc plant outside Syracuse, New York, Lutnick said that potential levies spelled out under a trade accord with Taiwan could also affect chipmakers from South Korea.
“Everyone who wants to build memory has two choices: They can pay a 100 percent tariff, or they can build in America,” Lutnick said on Friday in response to a reporter’s question, without naming any particular companies. “That’s industrial policy.”
Lutnick’s comments echoed a warning on Thursday following the signing of the Taiwan trade deal, which grants quota-based tariff relief to companies committing to investing in US-based manufacturing.
“If they don’t build in America, the tariff is likely to be 100 percent,” Lutnick told CNBC.
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