South Korea, US negotiate chip investments as tariff concerns grow
What's the story
South Korea and the US are in talks over semiconductor investments in the US, a Seoul official said on Friday. The discussions are part of broader bilateral negotiations between the two countries. This comes after US Commerce Secretary Howard Lutnick flagged planned tariffs on chips, raising concerns about their impact on ongoing investment negotiations.
Negotiation dynamics
Semiconductors are part of investment-related discussions
The presidential official acknowledged the complexity of the relationship between South Korea and the US, saying "there are various issues" that sometimes affect each other.
The official confirmed that semiconductors are part of these investment-related discussions.
They also said efforts are being made to ensure these issues don't hinder each other in their negotiations.
Tariff strategy
US to impose tariffs on semiconductor imports
Lutnick recently revealed that Washington is planning a "targeted, thoughtful tariff policy" on semiconductor imports.
He warned, "If you don't build here, expect to pay to enter the greatest market in the world," during a televised interview.
This statement highlights the US's intention to encourage domestic production of semiconductors by imposing tariffs on imports.
Information
Deal struck last year
Under a deal struck last year, which involved $350 billion of South Korean investment in US manufacturing, South Korean chipmakers will get US tariff rates "no less favorable" than those offered to any other competitor with an equal or larger volume of chip trade.
Industry growth
Surge in demand for semiconductors in South Korea
Home to Samsung Electronics and SK Hynix, the world's largest memory chipmakers, South Korea has seen a surge in demand for semiconductors.
The increase is largely driven by US tech firms racing to build AI infrastructure.
This growing demand highlights the importance of semiconductors in today's technology landscape and their role in driving innovation across industries.