South Korea to keep monitoring US chip tariffs to minimise impact, industry minister says

• The U.S. imposed 25% tariffs on certain advanced AI chips, but exemptions for data center and startup applications will limit direct impact on South Korean semiconductor companies
• South Korean officials met with semiconductor company representatives to assess the situation and develop response strategies
• President Trump may impose broader tariffs on semiconductor imports and derivative products to incentivize domestic manufacturing, creating significant uncertainty for the Korean chip industry

Summary

South Korea's Industry Minister Kim Jung-kwan announced Thursday that the government will closely monitor U.S. tariffs on AI semiconductor chips to minimize impact on domestic companies. The statement follows emergency meetings between ministry officials and South Korean semiconductor industry representatives.

Key Development:

The White House announced Wednesday a 25% tariff on certain advanced AI chips, prompting immediate concern from South Korea's semiconductor sector.

Initial Impact Assessment:

South Korean officials indicated the tariffs would not significantly affect local companies in the near term, as the levies do not apply to chips destined for U.S. data centers and startups—key markets for Korean manufacturers.

Industry Concerns:

Despite the limited immediate impact, semiconductor companies expressed significant concern about future uncertainty. A White House fact sheet suggests President Trump may impose broader tariffs on semiconductor imports and derivative products to incentivize domestic U.S. manufacturing, which could substantially affect Korean chipmakers' operations and market access.

Market Implications:

The potential for expanded tariffs creates considerable uncertainty for South Korea's semiconductor industry, a critical pillar of the nation's economy. Korean chip manufacturers, including major global players, rely heavily on the U.S. market for revenue. Any broader tariff implementation could disrupt supply chains, increase costs, and potentially reduce competitiveness of Korean semiconductor exports. The government's proactive monitoring stance suggests Seoul is preparing contingency measures to protect this strategic industry sector from escalating trade restrictions.