South Korea says Samsung, SK Hynix will not be subject to 100% US chip tariffs

[SEOUL] South Korea’s top trade envoy Yeo Han-koo said on Thursday that Samsung Electronics and SK Hynix will not be subject to 100 per cent US tariffs on chips.

Yeo said on radio that among various countries, South Korea will face the most favourable US tariff rates on chips under the trade deal between Washington and Seoul.

He did not elaborate.

US President Donald Trump said on Wednesday the United States will impose a tariff of about 100 per cent on semiconductors imported from countries not producing in the US or planning to do so. But it would not apply to companies that had made a commitment to manufacture in the US or were in the process of doing so.

Trump’s comments were not a formal announcement and much remains unclear.

Samsung has invested in two chip fabrication plants in Austin and Taylor, Texas, while SK Hynix has announced plans to build an advanced chip packaging plant and research and development facility for artificial intelligence products in Indiana.

“While both Samsung and SK Hynix have made US investments, there are doubts about whether SK Hynix’s packaging plant alone would fully qualify for tariff exemptions,” said Baik Gil Hyun, an analyst at Yuanta Securities.

“Samsung, on the other hand, appears to be benefiting not only from that but also from news that it has joined Apple’s supply chain.”

Apple said on Wednesday that Samsung Electronics will supply chips from its production plant in Texas for Apple products including iPhones.

Shares in Samsung Electronics climbed 2.6 per cent while shares in SK Hynix were trading up 0.6 per cent in line with the broader market.

Both companies declined to comment on Trump’s remarks. REUTERS