South Korea’s top trade official said Samsung Electronics and SK Hynix will not face 100% tariffs on chips exported to the US.

Yeo Han-koo, the country’s trade envoy, made the statement on August 7.

He said South Korea will face the most favorable US tariff rates on chips under a recent agreement with Washington.

Samsung Electronics and SK Hynix are major chip manufacturers based in South Korea.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ South Korea’s semiconductor dominance gives it leverage in US trade negotiations

Samsung and SK Hynix’s exemption from 100% tariffs reflects their critical role in global tech supply chains.

These two companies control approximately 60% of the global DRAM memory chip market, making them essential suppliers to major tech companies worldwide1.

When Trump announced potential 100% semiconductor tariffs in August, SK Hynix shares immediately dropped 3.1%, demonstrating how sensitive markets are to any disruption in South Korean chip production2.

This market dominance explains why South Korea secured what its trade envoy called “the most favorable U.S. tariff rates on chips” compared to other countries.

The US semiconductor industry’s reliance on South Korean production creates a mutual dependency that strengthens South Korea’s negotiating position in trade discussions.

2️⃣ Manufacturing commitments become the new currency of trade exemptions

The tariff exemption structure shows how the US is using trade policy to drive domestic manufacturing investment.

Trump’s announced 100% tariff specifically targets countries that don’t manufacture in the US or haven’t committed to building facilities there3.

South Korea’s broader trade deal includes a massive $350 billion investment commitment in the US, alongside plans to purchase $100 billion in US energy imports4.

Recent Samsung developments