South Korea says Samsung, SK Hynix will not face 100% US chip tariffs; Taiwan says TSMC ‘exempt’
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President Donald Trump on Aug 6 said the US will impose a tariff of about 100 per cent on semiconductors imported from countries not producing in the US or planning to do so.
PHOTO: BLOOMBERG
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SEOUL – South Korea’s top trade envoy Yeo Han-koo said on Aug 7 that Samsung Electronics and SK Hynix will not be subject to 100 per cent US tariffs on chips.
Mr Yeo said on radio that among various countries, South Korea will face the most favourable US tariff rates on chips under a trade deal between Washington and Seoul.
He did not elaborate. Both companies declined to comment on the remarks of President Donald Trump, who on Aug 6 said the US 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 will not apply to companies that have made a commitment to manufacture in the US or are in the process of doing so.
Mr Trump’s comments were not a formal announcement and much remains unclear.
Meanwhile, Taiwan on Aug 7 said Taiwan Semiconductor Manufacturing Company (TSMC) “is exempt” from the 100 per cent chip tariff.
“Because Taiwan’s main exporter is TSMC, which has factories in the United States, TSMC is exempt,” National Development Council chief Liu Chin-ching told a briefing in Parliament.
TSMC is the world’s largest contract maker of chips and counts Nvidia and Apple among its clients.
Some Taiwanese chipmakers “will be affected” by the 100 per cent tariff, but their competitors will also face the same levy, Mr Liu said.
“This is our current preliminary assessment, but we will continue to observe and propose short-term and medium-term assistance,” he added.
Samsung has invested in two chip fabrication plants in Austin and Taylor, both in 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 will fully qualify for tariff exemptions,” said Yuanta Securities analyst Baik Gil-hyun.
“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 Aug 6 that Samsung Electronics will supply chips from a 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.
TSMC shares surged 4.4 per cent. REUTERS, AFP
