South Korea to aid chipmakers to avert Rising Trade Pressures from U.S.

Last week, South Korean President Yoon Suk Yeol warned of the risks stemming from Trump's threat of steep tariffs on Chinese imports that could prompt Chinese rivals to slash export prices and undercut Korean chip firms overseas.

With the U.S. imposing new restrictions on advanced semiconductor exports to China, South Korea is proactively working to protect its economic interests. The concern stems from recent U.S. policies aimed at restricting advanced chip technology exports to China, a move that could disrupt operations for South Korean firms that rely on Chinese facilities.

South Korea is stepping up support for its semiconductor industry as U.S.-China trade tensions threaten critical operations for tech giants like Samsung and SK Hynix. This includes efforts to strengthen local production, consider incentives, and initiate diplomatic discussions that address the unique position of Korean companies heavily invested in China.

South Korean policymakers are exploring several avenues to mitigate these risks. One approach involves ramping up domestic production and incentivizing investments in South Korea’s semiconductor sector to reduce dependency on overseas facilities.

Additionally, the government is working on a comprehensive support package, including tax benefits, R&D funding, and workforce development to boost self-reliance. It has also been in close talks with the U.S. to discuss exemptions or adjustments that would prevent undue disruptions to Korean companies.

The Korean government’s proactive stance underscores the country’s goal to maintain a competitive edge while navigating the economic complexities of global semiconductor trade. By backing its chipmakers, South Korea aims to shield its tech industry from fallout, ensuring resilience as it pursues long-term growth in a landscape shaped by geopolitical shifts.