The U.S. administration under President Donald Trump has introduced a minimum import price system and tariffs on polysilicon and its derivatives, which is expected to have an unavoidable impact on the domestic industry. However, since finished memory and system semiconductors are not included in this measure, the direct shock to overall semiconductor exports from South Korea is expected to be limited. Nonetheless, the inclusion of solar cells and modules in the regulations raises concerns about increased cost burdens within that supply chain.
According to the Ministry of Trade, Industry and Energy, the White House announced on August 6 (local time) a proclamation introducing tariffs and a minimum import price (MIP) on polysilicon and its derivatives based on Section 232 of the Trade Expansion Act. This follows the investigation into polysilicon that began in July of last year and will take effect on December 4.
The minimum import prices are set at $21 per kilogram for polysilicon, $100 per kilogram for ingots (cylindrical polysilicon), and wafers. For solar cells, the price is set at $0.22 per watt, and for modules, it is $0.38 per watt. If the import price falls below these minimums, U.S. Customs will impose tariffs equivalent to the difference.
Additionally, a separate 15% tariff will apply to polysilicon derivative products. Products from countries that have trade agreements with the U.S., including South Korea, Japan, the European Union, Taiwan, and Switzerland, will face a total tariff of 15%, combining the most-favored-nation (MFN) tariff and the Section 232 tariff.
The impact on the semiconductor industry, which constitutes the majority of South Korea's exports, is expected to be limited. This is because finished semiconductors, such as memory chips exported by Samsung Electronics and SK Hynix, are not included in the Section 232 measures. However, some silicon wafers used in semiconductor manufacturing may be directly affected.
The solar industry is anticipated to experience a more significant impact, as the U.S. regulations extend beyond polysilicon to include ingots, wafers, solar cells, and modules. The U.S. government has noted that semiconductor-grade polysilicon accounts for only 2.4% of global polysilicon production, and the country relies heavily on imports for most solar-grade ingots, wafers, and cells.
However, companies expanding local production in the U.S. may find ways to reduce their tariff burdens. The U.S. Department of Commerce has indicated that it will exclude some tariffs under Section 232 for companies that receive approval for investment plans to establish or expand polysilicon and ingot, wafer, and cell production facilities in the U.S. This could provide an opportunity for domestic solar companies to defend their market position by increasing local production.
According to the Ministry of Trade, Industry and Energy, South Korea's exports of polysilicon to the U.S. subject to this measure were approximately $2.2 million last year. In contrast, exports of polysilicon derivative products are estimated at around $430 million.
The government plans to assess the impact on the industry and engage in discussions with U.S. officials. The Ministry submitted a position paper during the Section 232 investigation into polysilicon last August.
A ministry official stated, "We will hold a prompt meeting with relevant departments and industry representatives to closely examine the impact on exports to the U.S. and companies operating there, and we will work closely with U.S. officials to minimize the effects on our companies."
* This article has been translated by AI.
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