Protection racket? Asian semiconductor giants fear looming tariffs

Hieun Shin with Joy Chiang successful Taipei

Tue, May 13, 2025, 10:59 PM 4 min read

Inside 1 of South Korea's oldest semiconductor probe institutes, the cleanrooms and workshops are calm and immaculate, but extracurricular the Seoul National University campus, a spot tempest is brewing.

Last month, Washington announced a nationalist information probe into imports of semiconductor technology, which could enactment the manufacture successful the crosshairs of President Donald Trump's commercialized bazooka and inflict perchance devastating levies.

For chipmaking powerhouses South Korea and Taiwan, the consequences could beryllium enormous.

South Korea is location to Samsung Electronics and SK hynix, portion Taiwan hosts the world's largest declaration chipmaker, TSMC. Collectively, they nutrient a important chunk of high-end chips that person go the lifeblood of the planetary economy, powering everything from smartphones to missiles.

Taiwan exported $7.4 cardinal worthy of semiconductors to the United States successful 2024, portion South Korea's exports surged to $10.7 billion, a historical high.

Experts accidental the spectre of looming tariffs has spurred stockpiling, with fears levies volition thrust up user prices and wounded chipmakers.

The wide volition of Trump's policies is to unit the Asian spot giants to relocate accumulation stateside, a erstwhile technologist astatine Taiwanese spot steadfast MediaTek told AFP.

"TSMC going overseas to the US to physique fabs is similar paying extortion money," they said, adding that the projects hardly made a nett with margins "super low" successful high-cost America.

"From the American constituent of view, it's logical to sacrifice the remainder of the satellite for its ain interests, lone that we hap to beryllium the ones being sacrificed," the technologist said.

- A 'heavy blow' -

The US president's tolls could beryllium "quite complex", Kim Yang-paeng, elder researcher astatine Korea Institute for Industrial Economics and Trade (KIET), told AFP.

Rather than hitting the manufacture with a broad levy, the United States could people antithetic products specified arsenic HBM, which is indispensable for high-speed computing, and DRAM, which is utilized for memory.

Any important tariffs connected the sector, which relies connected analyzable manufacturing chains to nutrient high-end tech products, would beryllium a "heavy blow", the MediaTek technologist said.

Samsung, the world's largest representation chipmaker, and starring representation spot supplier SK hynix trust heavy connected indirect exports to the United States via China, Taiwan and Vietnam.

For example, Samsung produces tv panels successful South Korea, which are past assembled into finished televisions successful Vietnam earlier being shipped to the United States.