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South Korea open to working with Taiwan on US chip tariffs
South Korea is open to working with Taiwan on potential US tariffs on semiconductors, trade minister Yeo Han-koo said on November 24.
Taiwan is currently in talks with the US, while South Korea recently finalized a trade deal that reduces tariffs in exchange for investments in US strategic industries.
Under the agreement, the US said any future terms on semiconductor tariffs for South Korea would be at least as favorable as those given to other major exporters, which South Korean officials said refers to Taiwan.
A South Korean official declined to say if there have been direct discussions with Taiwan.
US officials may delay implementing the planned semiconductor tariffs, according to Reuters.
South Korea’s chip exports to the US rose 51.2% to US$1.2 billion in October, driven by demand for advanced chips used in AI.
🔗 Source: Reuters
🧠 Food for thought
Implications, context, and why it matters.
Tariff timing stays uncertain as Section 301 runs through March
- Scope and timing for US semiconductor tariffs remain unclear 1. Section 301 (a US trade law that authorizes tariffs after investigations into unfair trade practices) opened a probe into China’s chip dominance on December 23, 2024, with comments due February 5, 2025, and hearings set for March 11-12, 2025 1.
- It targets foundational or legacy semiconductors (older-generation chips) 1. Uses span defense, automotive, medical devices, and aerospace. Telecommunications, power generation, and the electrical grid are in scope 1.
- Past Section 301 actions on China used product exclusion processes that could shape future measures 2.
- Tariffs would likely follow the investigation, not arrive immediately 31. That timeline gives chipmakers time to comment and prepare. It also gives equipment suppliers and downstream electronics manufacturers time to plan.
US advanced packaging push opens near-term deals for equipment suppliers
- The Creating Helpful Incentives to Produce Semiconductors (CHIPS) National Advanced Packaging Manufacturing Program (NAPMP) funds US advanced packaging, or techniques that integrate multiple chips in one package to improve performance and energy efficiency 45. Awards total $300 million so far. It plans about 10 more awards ranging from $10 million to $150 million over five years, with concept papers due December 20, 2024 45.
- Eligible U.S. organizations can pursue NAPMP funding across five research and development (R&D) areas 5. That group includes semiconductor equipment manufacturers and materials suppliers. Focus areas cover equipment and tools. They also include power delivery and thermal management. Connector technology rounds out the list 5.
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