🚨 Trump Announces 100% Semiconductor Tariff
Today Korean Economic News for Beginners | 2025.08.10
0️⃣ Samsung & SK Hynix Expect Tax-Free Benefits Through US Investment
📌 Trump's '100% Semiconductor Tariff'... Could This Be a Turnaround Opportunity for Samsung & SK Hynix?
💬 President Trump's announced 100% semiconductor tariff plan is expected to take concrete shape next week. However, the possibility of tax exemptions for companies building factories in the US has been highlighted, raising expectations that Samsung Electronics and SK Hynix will receive exceptions or preferential treatment. Both companies are proceeding with US local production investment plans, and the industry believes Korean companies can benefit from big tech companies' supply chain strategies. While short-term uncertainty has increased stock volatility, it is being evaluated as an opportunity to establish themselves as core suppliers in the US semiconductor supply chain in the long term.
1️⃣ Easy Explanation
President Trump said he would impose a 100% tariff on semiconductors, but he also offered to exempt companies from tariffs if they build factories in America. Since Samsung and SK Hynix are already making large investments in the US, analysts say this could actually be beneficial in the long run.
A 100% tariff means adding a tax equal to 100% of the product's price. For example, if there's a $100 semiconductor, you'd have to add $100 in tariffs, making it sell for $200. This would double the price and completely eliminate competitiveness.
But President Trump also said he would "exempt companies that build factories in America from tariffs." This shows he wants foreign companies to come to America, invest, and create jobs.
Fortunately, Korea's major semiconductor companies are already investing in the US. Samsung Electronics is investing $17 billion (about 23 trillion won) to build a semiconductor foundry in Taylor, Texas. SK Hynix is also planning to invest $3.9 billion (about 5 trillion won) in an advanced packaging plant in Indiana.
What's important here is that these aren't just simple assembly plants, but cutting-edge facilities with the most advanced technology. Samsung's foundry will produce AI chips using 2-nanometer technology starting in 2026, and SK Hynix's packaging plant will handle the final processing of high-performance memory.
Also, semiconductors are very different from other industries because it's extremely hard to find substitutes. American big tech companies like Apple, Google, and Microsoft would have trouble making their products without Korean semiconductors. So rather than actually applying 100% tariffs to all semiconductors, they'll likely make exceptions for companies investing in America.
In the end, this tariff announcement looks threatening on the surface, but it's actually interpreted as a 'carrot and stick' strategy to increase foreign companies' investment in America.
2️⃣ Economic Terms
📕 Tariff
A tariff is a tax imposed on goods coming from foreign countries, used to protect domestic industries or increase government revenue.
- The higher the tariff rate, the more expensive imported goods become, making domestic products more competitive.
- A 100% tariff means you have to pay an additional 100% of the original price, effectively blocking imports.
- But if tariffs are too high, it increases costs for consumers and can lead to trade disputes.
📕 Foundry
A foundry is a specialized company that manufactures semiconductors designed by other companies.
- Semiconductor design companies prefer to outsource production to foundries rather than build their own manufacturing facilities, which cost tens of trillions of won.
- Samsung and TSMC control over 80% of the global foundry market.
- It's a high-value business requiring cutting-edge process technology and massive investment.
📕 Reshoring
Reshoring is a policy of bringing production facilities that went overseas back to the home country.
- It has gained attention as supply chain stability became important due to COVID-19 and geopolitical conflicts.
- The US is actively promoting reshoring for key industries like semiconductors and batteries.
- Foreign companies' local investment can also be seen as a form of reshoring.
📕 Packaging
Packaging is the final process of protecting completed semiconductor chips and connecting them to the outside world.
- It involves wrapping chips in plastic or ceramic materials and creating electrical connections.
- Recently, advanced packaging technology that combines multiple chips into one has become important.
- SK Hynix's Indiana factory will be this kind of advanced packaging facility.
3️⃣ Principles and Economic Outlook
✅ Actual Effects of Tariff Policy and Exception Conditions
Let's analyze how Trump's semiconductor tariff policy will actually work.
First, the 100% tariff is likely a 'negotiation card.' If 100% tariffs were actually imposed on all semiconductors, US companies would also be severely hurt. Apple's iPhones, Google's data centers, and Tesla's autonomous driving systems all use Korean semiconductors. If component prices suddenly doubled, these companies' competitiveness would also drop significantly. So they'll likely apply tariffs selectively while making exceptions for companies that increase investment in the US. This follows a similar pattern seen in past steel and auto tariffs.
Second, US domestic production investment will be the key condition for tariff exemptions. The Trump administration's top priority is 'creating jobs in America.' So they'll likely favor companies that build factories in the US and hire Americans, rather than those that simply export finished products. Samsung Electronics' Texas factory is expected to create about 3,000 direct jobs and over 10,000 indirect jobs. SK Hynix's Indiana factory also plans to create over 1,000 jobs. Companies with such investment plans are very likely to receive tariff exceptions.
Third, the special nature of semiconductor supply chains must be considered. Semiconductors go through a complex process taking 2-3 years from design to mass production. It's almost impossible to suddenly change suppliers or find new ones. Especially the advanced memory and foundry products made by Samsung and SK Hynix have almost no substitutes worldwide. So even if tariffs are imposed short-term, imports won't decrease much, and only US companies will face higher costs.
Ultimately, tariff policy is likely to be used as a tool to attract US investment rather than simply blocking imports.
✅ Korean Semiconductor Companies' Response Strategies
Let's look at how Samsung and SK Hynix can turn this tariff issue into an opportunity.
First, securing supply chain stability through US local production becomes core competitiveness. Samsung Electronics plans to start 2-nanometer process mass production at its Taylor, Texas factory from 2026. Semiconductors produced at this factory will naturally be excluded from tariff targets. More importantly, US customers will prefer locally produced products for supply chain stability. Companies like Tesla, Nvidia, and AMD are expected to use Samsung's US factory more actively. SK Hynix can also secure a 'Made in USA' brand by processing high-performance memory final assembly in the US through its Indiana packaging plant.
Second, tariff exemption benefits can provide price competitiveness over competitors. If tariffs are imposed on Chinese or Taiwanese companies while Korean companies are exempted, they can gain relative competitive advantages. Chinese companies like SMIC or YMTC will find it even harder to enter the US market due to tariffs. Meanwhile, Samsung and SK Hynix can do business in the US market without tariff burdens through their US investments, creating opportunities to expand market share. This will lead to strengthened competitiveness in the global semiconductor market long-term.
Third, strengthened cooperation with the US government can secure additional business opportunities. When they receive tariff exemptions through US investment, the US government will see Korean companies as 'friendly partners.' This can lead to opportunities to participate in future US government semiconductor projects or defense-related businesses. The US government actually plans to invest $528 billion in expanding domestic semiconductor production through the CHIPS Act, and foreign companies investing locally can also receive such support. Being recognized as a friendly nation's company can also give them more advantageous positions in technology competition with China.
Korean semiconductor companies' ongoing US investments are becoming key assets that can turn the tariff crisis into an opportunity.
✅ Global Semiconductor Supply Chain Restructuring and Opportunity Factors
Let's analyze the long-term impact of Trump's tariff policy on the entire semiconductor industry.
First, 'regionalization' of semiconductor supply chains will accelerate. Until now, the semiconductor industry has built a global division of labor system for efficiency. Design in the US, manufacturing in Korea and Taiwan, assembly in China. But as trade disputes and supply chain risks grow, 'regionalization' strategies building production bases for each major market are gaining attention. This creates new growth opportunities for Korean companies. Similar local production demand is expected to increase not only in the US but also in Europe and Southeast Asia.
Second, companies with superior technology will have even stronger negotiating power. As semiconductor tariffs increase, the value of companies with 'truly necessary technology' rises even more. Technologies like Samsung's 2-nanometer foundry technology and SK Hynix's high bandwidth memory (HBM) technology are core technologies that are difficult to replace worldwide. Companies with such technologies will have negotiating power not only for tariff exemptions but also for doing business under more favorable conditions. Companies like Nvidia and AMD are actually showing moves to strengthen cooperation with Korean companies.
Third, new opportunities will be created in semiconductor equipment and materials sectors. For Korean companies to produce semiconductors in the US, they need to supply related equipment and materials together. This provides US market entry opportunities for Korean semiconductor equipment companies (TESK, WONIK IPS, etc.) and materials companies (SKC, Dongjin Semichem, etc.). Korean semiconductor materials technology is world-class, so these companies' exports are expected to increase along with expanded US local production. This can lead to co-growth of the entire semiconductor ecosystem.
The reason tariff policy can transform from short-term threat to long-term opportunity is because of Korean semiconductor industry's technological capabilities and strategic position.
4️⃣ In Conclusion
Trump's announcement of 100% semiconductor tariffs appears threatening on the surface, but could actually provide new opportunities for Korean semiconductor companies. The key lies in tariff exemptions through US investment and securing supply chain stability.
The most important point is that Samsung Electronics and SK Hynix are already making large-scale US investments. Samsung's 23 trillion won Texas investment and SK Hynix's 5 trillion won Indiana investment will go beyond simple production base construction to become core pillars of the US semiconductor ecosystem. Imposing tariffs on companies making such investments would be contradictory policy from the US government's perspective.
Also, the characteristic difficulty of sudden supplier changes in the semiconductor industry works in Korean companies' favor. Advanced products like 2-nanometer foundry and high-performance memory can only be mass-produced by Samsung and SK Hynix worldwide. US big tech companies know this reality well and are expected to demand reasonable policies from the government.
Short-term stock volatility may be high due to uncertainty. Investor anxiety will continue until specific details of tariff policy are announced. But looking long-term, Korean companies can use this opportunity to establish more solid positions in the US market.
Most importantly, this situation shows that global semiconductor supply chains are shifting from 'efficiency-focused' to 'stability-focused.' If Korean companies establish themselves as core suppliers in each region based on their technological capabilities, they can create more stable and profitable business structures long-term.
The potential for co-growth in semiconductor equipment and materials sectors is also noteworthy. This could be a turning point where Korea's entire semiconductor ecosystem gains recognition and expands in the US market.
Ultimately, this tariff issue could be an opportunity rather than a crisis. It could be a catalyst for Korean semiconductor industry to play an even more important role in global supply chain restructuring and strengthen strategic partnerships with the US.
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