Kim Seong-yeol, the head of the Ministry of Trade, Industry and Resources’ Office of Industries and Enterprises, chairs an emergency meeting of a joint private-public task force for responding to US sectoral tariffs on semiconductors on Jan. 15, 2026. (Yonhap)
The US has hinted that it means to introduce sectoral tariffs on semiconductors, an idea that has been deferred until now. Last year, Korea carried out bruising negotiations with the US to secure lower reciprocal tariffs and tariffs on automobiles. Now, just two months later, it faces another uphill battle on semiconductor tariffs.
While attending a groundbreaking for a new factory by chipmaker Micron on Friday, US Commerce Secretary Howard Lutnick said that anybody making memory chips had a choice to make: “They can pay a 100% tariff, or they can build in America.”
The US’ move toward chip tariffs came after Trump signed a proclamation on Wednesday imposing a 25% tariff on semiconductors that are first imported to the US and then re-exported to China.
By itself, this measure will only have a limited impact on Korean companies. But the White House said in a related fact sheet that “in the near future, President Trump may impose broader tariffs on imports of semiconductors [. . .] to incentivize domestic manufacturing.”
The US and Taiwan concluded their tariff negotiations on Thursday, one day after this proclamation was announced. For any Taiwanese companies that build new semiconductor fabrication plants, or “fabs,” on American soil, the US promised to waive tariffs on chips equivalent to 250% of the fabs’ production capacity during construction and 150% of their capacity after completion.
Under this agreement, Taiwanese chipmaker TSMC announced plans to build at least four more fabs in the US along with six already in the works.
In Korea’s tariff negotiations with the US last year, the US promised not to impose semiconductor tariffs on Korea that are less favorable than those on rival countries such as Taiwan.
While Korea’s industry was relieved at the time by this “most favored nation” guarantee, there are now growing concerns that the outcome of the US-Taiwan negotiations could be used as leverage against Korea.
Samsung Electronics is currently building a US$37 billion fab in the US, and SK Hynix is building a US$3.8 billion packaging plant. But those two companies’ investments are much smaller than TSMC’s, and the US might well demand that they increase their domestic investments.
Given the high demand for memory chips amid the current boom in artificial intelligence and the fact that the US only receives 7.7% of Korea’s chip exports, Korea is not at a serious disadvantage in the negotiations.
Since the US’ position remains unclear, this is not the stage to be discussing a concrete action plan. Nevertheless, the government needs to remain in close communication with the affected companies and get to work on a negotiating strategy that will maximize the national interest.
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