Trump's Semiconductor Proclamation... Crisis and Opportunity for Korean Semiconductors [Why&Next]

Tariffs Target Re-exported GPUs
Highlighting HBM and Packaging Supply Chains
U.S. Investment and Chinese Demand Remain Key Challenges

The U.S. government has decided to impose a 25% tariff on certain high-performance semiconductors that do not contribute to its domestic technology supply chain, prompting the Korean semiconductor industry to closely monitor the situation. Since this measure primarily targets AI chips intended for re-export rather than domestic U.S. demand, there are expectations that memory-focused shipments supplied by Samsung Electronics and SK Hynix to U.S. data centers will, for now, be exempt from the tariffs. However, as this move could, in the long run, influence the U.S. semiconductor industry strategy, lead to the restructuring of supply chains around allies, and increase investment pressure by country, market attention is shifting from the short-term impact to the potential long-term consequences.

On January 16, industry insiders noted that the tariff is applied based on the end use and route, rather than the place of manufacture, making it different from traditional tariffs. According to a comprehensive review of the White House fact sheet, the U.S. Department of Commerce has designed the tariff to primarily target high-performance AI chips that meet certain computational performance and memory bandwidth standards, but are intended for re-export rather than for use in U.S. data centers or research. A representative example is the route by which Nvidia H200 and AMD MI325X chips produced in Taiwan are re-exported to China via the United States. Products consumed within the United States are exempt, and the Secretary of Commerce may grant additional exemptions if the products are deemed to contribute to the U.S. supply chain.

This is precisely why the domestic industry believes the short-term impact will be limited. The HBM and server DRAM supplied by Samsung Electronics and SK Hynix are mostly used directly in the data centers of U.S. cloud companies, making them less relevant to re-export routes. The tariff burden is also expected to fall mainly on Nvidia and AMD.

The concern lies in what comes next. In his proclamation, President Donald Trump stated that the U.S. would pursue country-by-country negotiations to expand tariffs to cover semiconductors and related products more broadly in the future. He instructed the Department of Commerce to report on the progress of these negotiations within 90 days, and included language suggesting that companies investing in the U.S. could receive tariff offsets. Last year, the U.S. also linked tariff reductions to TSMC’s expanded investment in its Arizona plant. This American approach of bundling tariffs, investment, supply chain and procurement, and security into a single package could also be applied to Korea.

This measure does not only pose challenges for Korean companies. The factors determining the performance and power efficiency of AI semiconductors are no longer limited to GPUs. Recently, bottlenecks in server systems have emerged in HBM and packaging connected to GPUs, changing the overall value of system components. If tariffs increase the procurement cost of GPU-based AI chips, cloud service providers will inevitably seek more efficient alternatives, and in this process, the strategic importance of HBM and packaging-areas where Korean companies have strengths-could increase further.

An industry official stated, "Since tariffs serve as a price signal, if GPU prices rise, customers will look for other components that can improve system efficiency. In this scenario, HBM and packaging will play a more important role, and the strategic value of Korean companies could actually grow."

An Ki-hyun, Executive Director of the Korea Semiconductor Industry Association, said, "If GPU prices rise, there may be a move to seek products not subject to tariffs. Although a 25% tariff alone may not reverse the price hierarchy, if regulations persist over the long term, demand for alternatives could emerge and opportunities for domestic AI semiconductor development may open up."

The China factor is also significant. This measure is effectively aimed at China's AI data center demand. While China is attempting to develop its own GPUs, there remains a significant gap in both performance and ecosystem, and it is even less competitive in HBM and packaging. If regulations are tightened, China will need to secure high-end memory and equipment that it can use within the restricted scope, which could increase its dependence on the materials, components, and equipment supply chains of Korea, Japan, and Europe.

The Korean government is treating this issue as an industrial and security matter rather than a trade issue. The Ministry of Trade, Industry and Energy held an emergency meeting with the semiconductor industry to analyze the details of the proclamation, while the Office of Trade Negotiations continues additional contact with the U.S. side. Minister Kim Jeonggwan has also ordered a comprehensive response, including submitting government opinions following the U.S. Section 232 investigation into semiconductors and critical minerals, reviewing response activities, analyzing impacts in communication with the industry, and making every effort to minimize damage.