SEOUL – South Korea’s trade authorities have indicated that the 25% U.S. tariff on certain advanced computing chips will have a limited short-term impact on South Korean companies, though officials remain cautious about future developments.

The announcement follows U.S. President Donald Trump’s proclamation on Wednesday, imposing import duties on specific artificial intelligence (AI) chips produced by companies such as Nvidia and AMD, citing national security concerns.

First-Phase Tariffs Target Specific AI Chips

South Korea’s Trade Minister Yeo Han-koo stated on Saturday that the initial measures focus exclusively on advanced AI chips and do not currently cover the memory chips that constitute the bulk of South Korean semiconductor exports.

“Since the memory chips that South Korean companies mainly export are currently excluded, the immediate impact is expected to be limited,” Yeo said, adding that while the government remains cautious, the early-stage tariffs primarily affect AI processors like Nvidia’s H200 and AMD’s MI325X.

Yeo also emphasized that it is “not yet time to be reassured”, warning that the potential second phase of U.S. tariffs could expand to include additional products or derivative devices, creating uncertainty for the industry.

U.S. Focus on Domestic Semiconductor Manufacturing

The tariffs come after a nine-month investigation under Section 232 of the Trade Expansion Act of 1962, targeting high-performance semiconductors and devices containing them. The U.S. aims to reduce reliance on foreign chipmakers, particularly from Taiwan and South Korea, while incentivizing domestic production.

The White House clarified that the tariffs will not apply to chips imported for U.S. data centers, startups, consumer electronics outside data centers, civil industrial applications, or public sector projects.

U.S. Commerce Secretary Howard Lutnick warned on Friday that South Korean and Taiwanese chipmakers not investing in U.S.-based manufacturing could face tariffs of up to 100% unless they commit to increasing production on American soil. The comments came at a ceremony for Micron’s new semiconductor plant near Syracuse, New York.

Implications for South Korean Semiconductor Industry

South Korea is a global leader in semiconductor exports, with companies like Samsung Electronics and SK Hynix dominating memory chip production. While the first-phase tariffs narrowly target AI chips, analysts note that any expansion of U.S. duties could impact:

• South Korean export revenues
• Investment strategies for semiconductor companies
• Global supply chains for AI and high-performance computing chips

The South Korean government has pledged to work closely with the domestic chip industry to mitigate risks and seek favorable outcomes in discussions with U.S. officials.

Broader Context: U.S. Semiconductor Strategy

The tariffs are part of a broader U.S. strategy to strengthen domestic semiconductor manufacturing and reduce dependency on foreign supply chains. This includes incentives for companies to build new factories in the United States and penalties for those that continue to manufacture chips abroad without U.S. investment commitments.

Experts predict that the tariffs could influence the AI chip market, technology investment patterns, and global semiconductor supply dynamics, as companies reassess production locations and export strategies.