SEOUL, January 19 (AJP) - To match the tariff concessions Taiwan has secured in the United States, South Korean chipmakers may be pressed to outline additional U.S. capacity expansion plans.
Their options are however constrained as the foundry market faces oversupply risks while large-scale memory fabs pose significant economic and strategic hurdles.
U.S. officials have adopted a more hardline tone in recent weeks, openly tying tariff relief to domestic semiconductor investment.
Yet experts and chipmakers caution that further U.S. manufacturing commitments are far more difficult for Korean firms than for their Taiwanese counterparts.
Following a groundbreaking ceremony for a new Micron Technology plant near Syracuse, New York, U.S. Commerce Secretary Howard Lutnick warned that tariff measures outlined in Washington’s recent trade accord with Taiwan could also affect chipmakers from South Korea.
“Everyone who wants to build memory has two choices: They can pay a 100% tariff, or they can build in America,” Lutnick said Friday.
Under the Taiwan deal unveiled Thursday, companies expanding U.S. operations will be allowed to import semiconductors tariff-free up to 2.5 times their existing capacity during construction, with reduced tariffs applied above that threshold.
Once new facilities are completed, the cap will be lowered to 1.5 times current capacity.
The agreement also sets a 15 percent tariff on goods from Taiwan and commits the island’s technology sector to at least $250 billion in direct investment in the U.S.
Taiwan Semiconductor Manufacturing Co. (TSMC) is expected to build at least four additional chipmaking plants on top of six already planned, requiring roughly $100 billion in new capital.
The Taiwanese government has said it will provide $250 billion in credit guarantees to support the investment.
South Korea’s accord with the United States revealed last October, sets a 15 percent tariff on most goods while exempting semiconductor imports for now. The agreement includes a $350 billion South Korean fund for U.S. investments, but $150 billion of that is earmarked for shipbuilding, and the remaining $200 billion is government-led and not limited to semiconductors.
Private-sector commitments are far smaller. Samsung Electronics has expanded its planned investment in Taylor, Texas, to $37 billion through 2030, up from an initial $17 billion. SK hynix has announced a $3.87 billion investment in Indiana to build an advanced packaging facility for artificial intelligence memory.
How much tariff relief Washington will grant in exchange for those investments is emerging as a central negotiating issue. While tariffs will be imposed only after country-by-country talks are completed, pressure is already building.
Washington has increasingly blurred the line between trade and industrial policy, explicitly using tariffs to steer semiconductor supply chains toward domestic production.
“In practice, the two are closely intertwined,” said Ahn Ki-hyun, secretary general of the Korea Semiconductor Industry Association. “When the U.S. talks about tariffs, what it really wants is investment. And investment naturally connects to supply chains.”
The fundamental difference, industry officials say, lies in industrial structure.
“Korea and Taiwan are different in what they make,” Ahn said. “Taiwan is centered on system semiconductors and foundries, while Korea is focused on memory. From the U.S. perspective, the logic is simple — if chips are made in America, the problem is solved.”
TSMC has already begun production at its first U.S. fab and is preparing additional facilities. Korea, however, currently has no memory wafer production operating in the United States, a gap that analysts say lies at the core of the challenge.
Building memory fabs overseas is technically feasible but significantly more complex. DRAM and high-bandwidth memory production requires large-scale infrastructure, long stabilization periods and extremely high yield control.
“Memory fabs are not fundamentally different from system semiconductor plants in terms of construction,” Ahn said. “But unlike foundries, there is currently no memory production running in the U.S., which means the timeline is much longer.”
Analysts warn that if Washington benchmarks Korea against Taiwan’s investment framework, Korean chipmakers would face a wide gap between existing commitments and the level of spending needed to secure comparable tariff treatment. New memory fabs would require tens of billions of dollars and several years before meaningful output could be achieved.
Samsung Electronics said it is closely monitoring developments.
“We are reviewing all news and policy changes related to tariffs,” the company said. “Internal discussions are ongoing, but at this stage, there is no official comment we can provide.”
Kim Yang-paeng, a senior research fellow at the Korea Institute for Industrial Economics and Trade (KIET), said that estimating the scale of additional investment required under a Taiwan-style framework would be extremely difficult.
“If the United States were to demand a similar investment model from Korea, it is not a matter of tens or even hundreds of trillions of won,” Kim said. “The scale would be virtually impossible to quantify in meaningful terms.”
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