Post by : Badri Ariffin

U.S. President Donald Trump has unveiled a robust 25 percent tariff on several advanced semiconductor chips, notably including Nvidia’s H200 AI accelerators, which adds a layer of unpredictability to the worldwide semiconductor supply chain.

As per a recent proclamation and fact sheet from the White House, this tariff impacts leading computing chips, specifically Nvidia H200 and AMD MI325X. This decision is a reflection of the U.S. government's ongoing effort to bolster domestic semiconductor production.

However, it is important to note that chips brought in explicitly to promote U.S. technology supply chain progression or domestic semiconductor manufacturing will be exempt from this tariff.

This implies that chips like the H200, produced in Taiwan and sent to the U.S., before being exported to China, will incur the 25 percent tariff.

Industry analysts caution that broader tariffs on semiconductors and related products could be introduced soon, creating an atmosphere rife with uncertainty for market players.

Implications for Korean Semiconductor Producers

This decision has led South Korean semiconductor manufacturers to review their vulnerabilities. The AI accelerators affected by this tariff depend on high-bandwidth memory (HBM3E) from firms such as SK hynix and Samsung Electronics.

However, insiders claim the immediate consequences for these South Korean memory firms will be minimal, given that most memory components are not directly shipped to the U.S., but rather sent to original equipment manufacturers (OEMs) in countries like Taiwan before culminating in products that enter the U.S. market.

“Memory suppliers possess limited insights into the ultimate destination of their chips,” stated an industry representative, emphasizing that tariff negotiations are typically managed by chipset manufacturers like Nvidia.

Additionally, South Korea benefits from most favored nation (MFN) treatment regarding chip exports to the U.S. Following a trade agreement reached between Trump and South Korean President Lee Jae Myung last November, Seoul was reassured against facing discriminatory chip tariffs.

Market Pressures and Future Outlook

While there is limited direct exposure, market analysts warn that escalated tariffs on firms like Nvidia could send shockwaves through the supply chain, forcing manufacturers to transfer increased costs to their component suppliers.

U.S.-based Micron may feel short-term repercussions due to its widespread manufacturing footprint. Nonetheless, as these policies aim to uplift the U.S. semiconductor sector, some specialists predict potential long-term advantages for Micron.

“The current situation is fraught with unpredictability,” commented another expert, highlighting that Trump's frequent tariff adjustments make it complicated for businesses to project long-term consequences.

South Korea's Strategic Response

In light of these developments, Trade Minister Yeo Han-koo has prolonged his visit to the U.S. to thoroughly assess how the tariff will affect South Korea's semiconductor landscape.

The Ministry of Trade, Industry and Resources convened an emergency session, affirming its commitment to mitigating any adverse effects while maintaining open dialogue with impacted sectors.

#Global News