South Korea: US Chip Tariff Impact Limited for Now

Limited Immediate Impact for South Korean Chipmakers

South Korea's Trade Minister, Yeo Han-koo, stated that a new 25% U.S. tariff on specific advanced computing chips will have a limited immediate effect on the country's semiconductor companies. The assessment is based on the tariff's narrow scope targeting specific AI processors.

Tariff Overview and Scope

The U.S. proclamation, under Section 232 of the Trade Expansion Act, targets high-performance chips from companies like Nvidia and AMD to address national security and boost domestic production. Crucially, the measure currently excludes memory chips, which are the primary semiconductor export for major South Korean firms, thus minimizing the initial disruption.

Economic Outlook and Future Risks

While the initial economic fallout is contained, Minister Yeo cautioned that uncertainty remains over a potential expansion of the tariffs. U.S. Commerce Secretary Howard Lutnick also warned that companies not investing in American production could face significantly higher duties in the future, signaling a long-term risk for the global supply chain.

Conclusion

The South Korean government will continue monitoring the situation closely. For now, the direct impact is minimal, but evolving U.S. trade policy remains a key factor for the global semiconductor market. The focus is on potential future measures and their broader implications.

FAQ

Q: Which chips are affected by the new US tariff?
A: The 25% tariff targets specific advanced computing and AI chips, such as Nvidia’s H200 AI processor and AMD’s MI325X.

Q: Why is the impact on South Korea considered limited?
A: South Korea's main semiconductor exports are memory chips, which are currently not included in this specific tariff measure.

Source: Investing.com