South Korea says its key chipmakers are exempt from 100% tariffs

Trade Minister of the Republic of South Korea Yeo Han-koo said on Thursday that chipmakers Samsung Electronics and SK Hynix won’t be subject to 100% U.S. tariffs on semiconductor chips. He also believes South Korea will face the most favourable U.S. tariff rates on chips.

U.S. President Donald Trump warned on Wednesday that countries that do not produce semiconductors in the U.S., or are planning to do so, will face 100% tariffs on semiconductor exports to the U.S. He also exempted countries that had made a commitment to manufacture chips in the U.S. or were in the process of doing so.

Samsung and SK Hynix make U.S. investments

🇺🇸 Make It Make Sense unless you agree Trump is here to shrink US into a regional power & encourage BRICS.

Trump announces 100% tariff on all semiconductors entering the US, exempting companies that build in America whilst supporting semiconductor exports to China. https://t.co/3bp6rBGkq7

— Simon Dixon (@SimonDixonTwitt) August 6, 2025

The President didn’t make a formal announcement, making his comments seem unclear for now. Yeo Han-koo also said he hoped there would be a trade deal between Washington and Seoul on semiconductors, but he did not elaborate further. 

South Korea’s Samsung owns two chip fabrication sites in Texas, one in Austin and another in Taylor. The firm’s new site is part of a larger expansion to boost domestic chip manufacturing. The Center for American Progress revealed that the project is under the CHIPS and Science Act, which provides incentives for domestic chip manufacturing.

The U.S. Commerce Department granted SK Hynix $458M last year to support the construction of a chip packaging plant in West Lafayette, Indiana. The South Korean firm also announced that it plans to invest $3.87 billion in the project, and the government will provide $500 million in loans as part of the deal.

“While both Samsung and SK Hynix have made U.S. investments, there are doubts about whether SK Hynix’s packaging plant alone would fully qualify for tariff exemptions.” – Baik Gil-hyun, Analyst at Yuanta Securities.

At the time of publication, Samsung Electronics’ share price saw a 1.74% surge in the last 24 hours, to 70,050 Korean won. SK Hynix’s stock price also saw a mere 0.3% rise in the last 24 hours to 259,250 KRW.

Trump announced last week that the U.S. had agreed to a trade deal with the Republic of Korea. He imposed a 15% levy on imports from the Asian trading partner. 

Samsung plans to supply iPhone chips from Texas

"This (Samsung in Texas) facility will supply chips that optimize power and performance of Apple products, including iPhone devices," Apple said in a statement.

Samsung's chip contract manufacturing business is expected to reduce losses by securing new orders in 2026 to make… https://t.co/Zg0PQAz0V3

— Ray Wang (@rwang07) August 7, 2025

Gil-hun also argued that Samsung would benefit from the news that it would include Apple in its supply chain. The iPhone maker revealed on Wednesday that the South Korean company will supply chips from its production plant in Texas for Apple products.

Apple said on Thursday that it’s working with Samsung at its fab in Austin to launch an innovative new technology for manufacturing chips. The company said the initiative will allow the facility to supply chips that optimize the power and performance of Apple products, including iPhones.

Kiwoom Securities analyst Park Yu-ak argued that the chips in question are likely image sensors for next-generation iPhones. He believes the initiative of producing image sensors for the iPhone 18 next year would boost sales in Samsung’s semiconductor division.

Sony has been Apple’s source for image sensors for iPhones. It accounted for over 50% of the global image sensor market as of last year, while Samsung accounted for 15.4%. The iPhone maker also revealed that it would spend an additional $100 billion in U.S. investments, reaching $600 billion in investments in the U.S. over the next four years.

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