South Korea’s trade minister, Yeo Han-koo, said on January 17, 2026, that President Trump’s newly announced 25% tariff on certain advanced semiconductors is expected to have only a limited short-term impact on Korean companies. The tariff, imposed under Section 232 on national security grounds, primarily applies to AI processors that are imported into the United States and later re-exported. It does not cover memory chips, which account for the bulk of Samsung Electronics’ and SK Hynix’s shipments to US data centres and other major customers.
Officials added that consultations between the government and industry have resulted in exemptions that reduce the initial impact of the policy. However, comments from the White House suggesting the possibility of broader tariffs after negotiations with Taiwan and South Korea have prompted a more cautious outlook.
Exemptions Shield Memory Dominance
For now, South Korea’s core chip exports remain largely untouched. Memory products such as DRAM and NAND, which are widely used in servers, continue to be shipped to the United States without tariffs and account for most of the country’s semiconductor sales. Analysts say the real impact of the new measures falls instead on AI GPUs made by Nvidia and AMD, particularly those re-exported to China.
The government has moved quickly to calm the industry. After convening an emergency meeting, Industry Minister Kim Jung-kwan said there was no sign of panic, pointing out that chip exports to the United States in 2025 had already surpassed automobiles, making semiconductors South Korea’s second-largest export sector.
According to Han A-reum of the Korea International Trade Association, the current round of negotiations is placing a greater strain on Taiwan, while South Korean chipmakers remain largely unaffected for now.
Phase Two Uncertainty Looms Large
The White House has signaled that tougher trade measures may be on the way for the semiconductor industry. In a recent fact sheet, the administration said it is considering broader tariffs on chips and related products as part of a push to boost US manufacturing, along with programs designed to offset the impact on the domestic industry.
Commerce Secretary Howard Lutnick delivered a sharper warning, saying foreign chipmakers from countries such as South Korea and Taiwan could face tariffs of up to 100% unless they commit to building factories in the United States.
Some companies may already be positioned to weather the pressure. Samsung is expanding its operations in Texas, while SK Hynix has announced plans for facilities in Indiana. Still, output not linked to US plants could be targeted, especially after recent Supreme Court decisions strengthened the government’s ability to impose reciprocal tariffs.
As the uncertainty grows, companies are pressing Seoul to negotiate bilateral agreements modelled on the arrangements the United States has reached with Taiwan.
Strategic Responses and Market Ripples
Seoul moved quickly to signal vigilance after the latest trade developments, saying it would closely track the situation and assist companies through negotiations. Analysts said the policy shift could still prompt longer-term changes, as manufacturers rethink supply chains under President Trump’s renewed push to bring production back to the United States.
Markets reacted cautiously. Korean shares slipped slightly, but losses were limited as demand for memory chips remained strong, supported by the ongoing AI boom. That resilience helped memory-focused companies fare better than peers concentrated on logic chips and GPUs.
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