S. Korean chip makers face concerns over not being exempt from Trump's tariffs plan

Despite government reassurances, concerns over the possibility of not being granted an exemption from the extra tariffs plan are spilling over to the local chip industry.

Our Kim Bo-kyoung has this report.

President Trump's plan to impose tariffs on imported chips is putting South Korean manufacturers on edge.

Semiconductors, represent Seoul's second-largest export to the U.S. following vehicles, with shipments totaling more than ten-billion U.S. dollars ---around 14-point-7 trillion Korean won ---last year.

This accounts for a little more than seven percent of the country's overall exports to the U.S.

Although it seems small compared to Korea's exports to China or Hong Kong, it cannot be overlooked as a considerable amount of semiconductors are exported to the U.S. indirectly after being assembled or processed in countries such as Taiwan.

When it comes to South Korean chipmakers, Samsung Electronics is producing non-memory chips at its Austin plant in Texas, and constructing a foundry in Taylor, of the same state; while SK hynix is to build a high bandwidth memory packaging plant in Indiana.

If Trump does acknowledge such investments already made, it is likely these chipmakers would be exempted.

However, if they become subject to the tariffs, they would suffer a substantial hit as most memory chips ---DRAM and NAND ---are being produced within the country, as well as in China.

Samsung produces memory chips in South Korea's Hwaseong, Pyeongtaek, and Xi'an in China; while SK Hynix is producing them in South Korea's Icheon and Cheongju, and China's Wuxi and Dalian.

Concerns are mounting, but one expert says it is unlikely the tariffs plan will be able to go as Trump said, as it could hurt industries and consumers in the U.S. as well.

"The U.S. right now is investing substantially in AI and data centers, so its demand for semiconductors is very high, and if these companies cannot buy foreign-made semiconductors, these AI datacenters may not be built or their cost will go up substantially. So not only will it hurt American consumers and IT industries, but also the country may fall behind in its AI race with China."

Meanwhile, Samsung Electronics shares closed at 70-thousand-500 Korean won on Thursday, up 2-point-4-7 percent following the news that Samsung would manufacture Apple's next-generation chips at its foundry plant in Texas, while SK Hynix rebounded during the day and closed at 262-thousand Korean won after having dropped sharply early due to tariff concerns.

Kim Bo-kyoung, Arirang News.