Korea faces chip threats on all sides with possible U.S. tariffs, Japanese expansion
Published: 06 Apr. 2025, 18:51
Updated: 07 Apr. 2025, 11:35
![U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington on April 2 [REUTERS/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/04/07/f9ad82d0-7037-40fe-9d6d-e899f42e3a62.jpg)
U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington on April 2 [REUTERS/YONHAP]
Korea’s semiconductor industry is facing mounting pressure on multiple fronts as the United States ramps up its “self-sufficiency” drive and Japan aggressively pursues advanced foundry production.
U.S. push for memory chip production
U.S. President Donald Trump said Thursday that tariffs on semiconductor products would begin “very soon,” prompting concerns in Korea that memory chips may become the next target in Washington’s on-shoring campaign.
One day earlier, Trump said tariffs give the U.S. tremendous negotiating power, raising the possibility that Korean firms may be pushed to establish memory chip manufacturing facilities in the country.
The United States already holds strengths in chip design and has secured front- and back-end manufacturing capacity through Taiwan’s TSMC, which is building facilities in Arizona. However, the country remains dependent on Korean production for memory chips.
“The United States currently has only one major memory chipmaker, Micron, and needs to expand domestic production capacity,” said Kim Yang-paeng, a senior researcher at the Korea Institute for Industrial Economics and Trade.
While demand for high-performance memory chips such as high bandwidth memory (HBM) continues to grow with the AI boom, Micron still lags behind Samsung Electronics and SK hynix in both technology and production capacity. Given Trump’s repeated claims that the United States was “robbed” of its semiconductor leadership by countries like Korea and regions like Taiwan, pressure on Korean companies to follow TSMC’s lead and invest in U.S.-based memory chip production is likely to increase.
Although only 7.5 percent of Korea’s total semiconductor exports went to the United States in 2023, nearly 79.6 percent of that was memory chips. As domestic chip production grows in the United States, tariffs could further burden Korean memory chip exports.
![Rapidus CEO Atsuyoshi Koike speaks at a press conference in Tokyo, Japan about semiconductor manufacturing plans on Apr. 1. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/04/07/43aa02ac-a5c3-4c1c-bc92-99ca9e910dc9.jpg)
Rapidus CEO Atsuyoshi Koike speaks at a press conference in Tokyo, Japan about semiconductor manufacturing plans on Apr. 1. [YONHAP]
Japan’s Rapidus eyes global foundry orders
Japan is also accelerating its bid to reestablish itself as a major player in semiconductors.
Foundry startup Rapidus, backed by the Japanese government and major corporations including Toyota, is aiming to mass-produce 2-nanometer chips by 2027 and is currently negotiating with 40 to 50 global firms, including Apple and Google.
TSMC is expected to begin its own 2-nanometer chip production later this year. Rapidus CEO Atsuyoshi Koike told Japanese news outlet Nikkei on Saturday that the two-year gap could be overcome through manufacturing efficiency.
“We can reduce the turnaround time from order to chip production and packaging by up to one-third of current standards,” Koike said. “The pace of prototype improvement is fast, and yields are steadily increasing.”
The Japanese government has so far invested over 1.8 trillion yen ($12.3 billion) into Rapidus, including capital contributions.
![U.S. President Donald Trump holds a signed executive order on tariffs in the Rose Garden at the White House in Washington on April 2. [REUTERS/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/04/07/97eaf2fc-9edb-4228-9a5f-dc34eb8b5f0f.jpg)
U.S. President Donald Trump holds a signed executive order on tariffs in the Rose Garden at the White House in Washington on April 2. [REUTERS/YONHAP]
Strategic choices for Korea
Samsung Electronics currently manufactures all of its DRAM chips domestically, while SK hynix operates a DRAM production line in Wuxi, China, but completes advanced processes such as HBM packaging in Korea. Analysts warn that moving high-value production, even partially, to the United States could trigger job losses, weaken the local supply chain and raise concerns over potential technology leaks.
“Samsung has announced plans to invest 360 trillion won ($246.7 billion) in its semiconductor cluster in Yongin, but challenges remain, including electricity and water supply,” said Kim Dae-jong, a business professor at Sejong University.
“To encourage companies to continue investing in Korea despite tariff risks, the government must provide bold policy support and ensure a stable investment environment.”
Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY LEE GA-RAM [[email protected]]
with the Korea JoongAng Daily
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