South Korea joins US in chip investment discussions as Washington prepares broad tariff framework

South Korea has signalled that chip investment is now central to its negotiations with Washington amid emerging plans for a comprehensive US tariff system targeting high-tech imports, with potential impacts on global supply chains and AI infrastructure.

South Korea said on 4 September that semiconductor investment is now part of its wider talks with Washington, a sign that Howard Lutnick’s latest tariff warning is already feeding into negotiations rather than remaining a rhetorical threat. A presidential official in Seoul said chip investment issues were being discussed with the United States and were affecting other parts of the bilateral agenda, after the US commerce secretary said companies that do not build in America should expect to pay to enter the US market. (investing.com)

Lutnick’s outline, set out in interviews during the G20 Innovation Ministerial in Chapel Hill, North Carolina, points to a tariff regime that would reward local manufacturing and penalise foreign production. Yonhap reported that he backed the idea of linking tariff relief directly to investment in US chip plants, saying: “If you build in America, we will give you tariff relief, and if you don’t build in America, then you will pay tariffs.” The same reporting said officials are considering going beyond semiconductors themselves to finished technology products including laptops, gaming consoles and servers, with country-specific rates and quotas also under discussion. (m-en.yna.co.kr)

That matters because the administration is no longer presenting chip levies as a one-off threat. Seoul Economic Daily reported that Lutnick described the policy as a formal tariff framework and said companies already understood that broader duties were coming. The paper also said options under review include a phased introduction and a grace period, suggesting the White House is looking at an enduring system rather than a sudden announcement designed purely for leverage. (en.sedaily.com)

The machinery for such a move is already in place. AP reported that the Commerce Department has opened a Section 232 national-security investigation covering imported chips, chipmaking equipment and products that contain semiconductors. The review extends across the supply chain, from assembly, testing and packaging to the risks of concentrating production overseas, and it will examine the effect of foreign subsidies, “foreign unfair trade practices and state-sponsored overcapacity”. Lutnick has also said semiconductors, pharmaceuticals and autos will be handled as sector-specific tariffs and that “those are not available for negotiation”. (apnews.com)

There is also precedent. Asia Business Daily reported that Washington had already imposed a 25% tariff in January 2026 on certain high-tech semiconductors, and that the next step under discussion would widen the scope to products in which advanced chips are embedded. That would turn a targeted duty on a narrow class of imports into a much broader tax on hardware used to build data-centre capacity and consumer electronics, at a moment when the United States is trying to expand AI infrastructure quickly. (view.asiae.co.kr)

For South Korean groups, the practical question is whether existing American projects will be enough to qualify for relief. Financial News said Samsung Electronics is building an advanced foundry in Taylor, Texas, with at least $17 billion committed there and more than $37 billion planned across its Texas operations. SK hynix, meanwhile, is investing more than $4 billion in a high-bandwidth memory packaging plant in West Lafayette, Indiana, where mass production is scheduled for the second half of 2029. According to the same report, Professor Jonghwan Lee of Sangmyung University said: “The United States desperately wants production plants located within its borders.” (en.fnnews.com)

The administration argues that this pressure is already delivering results. Lutnick has claimed there is about $1.2 trillion of committed investment tied to semiconductor production in the United States, naming TSMC and Micron as leading examples. Asia Business Daily said he put TSMC’s Arizona spending at $265 billion and Micron’s at $250 billion. Folha added a wider regional backdrop: Taiwan’s economy grew 13.72% in the first half of 2026, its strongest first-half performance since 1976, helped by the AI-driven chip boom that has kept Asian manufacturers busy even as Washington threatens fresh trade barriers. (www1.folha.uol.com.br)

However, the policy also carries risks for the White House’s own technology ambitions. Reporting in Seoul Economic Daily on the earlier Politico disclosures said a wider tariff net could slow the build-out of US artificial-intelligence infrastructure during a continuing global shortage of advanced chips. Asia Business Daily said tariffs on finished servers could raise the cost of building data centres in the United States because those systems depend on AI accelerators, memory and networking semiconductors imported through complex supply chains. Yonhap likewise noted warnings from technology companies that broader chip duties could undermine US hopes of leading in AI. (en.sedaily.com)

What has not emerged is the detail that would let companies price the risk properly. No tariff rate has been announced for this next phase, no threshold has been published for how much US investment would qualify a company for relief, and no timetable has been set. Even so, the direction is clearer than before: the Trump administration appears to be using tariff policy not simply to restrict imports, but to force chipmakers and electronics groups to decide whether access to the US market is best protected by moving more of the semiconductor chain onto American soil. (m-en.yna.co.kr)