The Trump administration's offer of tariff-free treatment to Taiwan's TSMC in exchange for $165 billion in U.S. investment has put Samsung Electronics and SK Hynix, the world's top two memory chipmakers, under intense pressure to expand their American operations.
South Korea secured the same tariff conditions as Taiwan in its trade negotiations with the United States. However, the situation has changed. TSMC's U.S. investment dwarfs those of Samsung and SK, raising the possibility of demands for comparable additional commitments from the Korean companies.
According to foreign media reports on Friday, the U.S. linked Taiwan's semiconductor tariff exemption to TSMC's customers. The tariff agreement allocates duty-free benefits to American tech giants such as Amazon and Microsoft that outsource chip production to TSMC.
The semiconductor tariff formula agreed between the U.S. and Taiwanese governments is unfavorable to both Samsung Electronics and SK Hynix. Samsung, which has struggled in its foundry business, signed large-scale supply contracts with U.S. tech companies including Tesla and Apple last year, hoping to improve its performance. However, to receive sufficient tariff-free quotas, the company may need to expand its U.S. facilities to TSMC's level.
Industry observers are more concerned that they cannot simply apply the same terms from the U.S.-Taiwan agreement. Samsung Electronics plans to invest approximately $38.9 billion (about 57 trillion won) in the U.S. by 2030, including $37 billion for its Taylor, Texas plant and $1.9 billion for Austin facility expansion. SK Hynix has committed $4.1 billion (about 6 trillion won) to build an advanced packaging plant in Indiana.
To match TSMC's $165 billion U.S. investment, Samsung and SK would need to invest an additional $122 billion (about 178 trillion won) in America. However, both companies face limited financial capacity, with Samsung and SK Hynix already committed to 360 trillion won and 600 trillion won respectively for their Yongin semiconductor cluster investments.
Even if the companies shift toward building additional U.S. production facilities to avoid tariff impacts, they face a dilemma of revising their Yongin cluster investment plans. Constructing a single memory chip production line in the U.S. as demanded would require approximately 60 to 70 trillion won.
SK Hynix is exploring various options to secure additional investment funding, including listing American Depositary Receipts on U.S. stock exchanges. If large-scale additional U.S. investments become necessary, reductions to Samsung and SK's Yongin semiconductor cluster investments cannot be ruled out.
"Semiconductor facility investments require a 10-year outlook, making it difficult to base decisions on tariffs alone," an industry official said.
If Samsung Electronics and SK Hynix fail to secure the same tariff exemptions as Taiwan, the semiconductor "super cycle" driving recent stock market gains could suffer significant damage.
SK Hynix's high-value High Bandwidth Memory is exported to Taiwan for assembly, but the market is also experiencing shortages of commodity DRAM products, pushing prices higher. Most of these products are manufactured at domestic production lines and exported.
South Korea directly exported $12.3 billion (about 18 trillion won) worth of memory semiconductors to the U.S. last year. This year, total semiconductor exports are expected to exceed $200 billion (about 292 trillion won), with U.S. exports surpassing $20 billion (about 29 trillion won). If Samsung Electronics and SK Hynix face 25% tariffs, their tariff burden alone would exceed 7 trillion won. Should Korean semiconductors routed through Taiwan and Mexico also become subject to tariffs, costs could increase astronomically.
U.S. pressure is intensifying. Commerce Secretary Howard Lutnick delivered a strong message at Micron's groundbreaking ceremony on April 16: "Companies that want to make memory chips have only two choices—pay 100% tariffs or manufacture in America."
The industry says it will respond according to the outcome of government-to-government negotiations. Many observers believe the worst-case scenario will not materialize, as full tariffs on Korean semiconductors would also harm American companies.
"With memory chips in short supply globally, if tariffs are imposed, significant costs will ultimately be passed on to customers," another industry official said.