The Trump administration’s plan to impose tariffs exceeding 25% on semiconductors is expected to have a significant impact on South Korea’s memory chip industry, analysts say. The proposed tariffs would apply to both memory chips and foundry services, affecting major players such as Samsung Electronics and SK Hynix, which rely heavily on memory production, as well as Taiwan Semiconductor Manufacturing (TSMC), a leading foundry operator. While memory chips are mass-produced and highly sensitive to price fluctuations, foundry services involve customized chip manufacturing based on client specifications, making them less susceptible to cost changes.
To avoid the tariffs, companies would need to manufacture semiconductors in the United States. However, Samsung’s Austin plant and its under-construction facility in Taylor, Texas, are dedicated to foundry operations rather than memory production. SK Hynix is building a semiconductor back-end processing plant in the U.S., but no memory chips made in South Korea and sold in the U.S. would be exempt from tariffs. Compounding the challenge, U.S. chipmaker Micron Technology is set to begin memory production at a new facility in Idaho next year. While Samsung and SK Hynix are exploring potential countermeasures, industry sources suggest viable alternatives remain limited.
The U.S. government has yet to clarify which countries or semiconductor products will be affected by the tariffs. However, if the measures resemble Trump’s steel and aluminum tariffs, South Korea could be hit especially hard. Last year, South Korea exported 15.4 trillion won ($10.7 billion) worth of semiconductors to the U.S., with memory chips making up 79% of the total. Samsung and SK Hynix produce DRAM and NAND flash memory in both South Korea and China, but nearly 70% of their output comes from South Korean plants.
Currently, Micron produces most of its memory chips in Taiwan and Japan. If the tariffs are applied uniformly, South Korean chipmakers may not necessarily be at a disadvantage. However, Micron’s plans to ramp up domestic production introduce a critical variable.
The U.S. chipmaker is investing 180 trillion won ($125 billion) to build large-scale memory plants in Idaho and New York. Production at the Idaho facility is set to begin next year, while the New York plant is expected to start mass production in 2028. A substantial portion of memory chips sold in the U.S. market could be replaced with Micron products. “Memory chips are largely indistinguishable in quality, so even a few cents' difference in price can influence purchasing decisions,” an industry official said. “If a 25% tariff is imposed, South Korean manufacturers will struggle to compete with Micron’s U.S.-based production.” Establishing memory chip plants in the U.S. is not a straightforward option for South Korean firms, as Samsung and SK Hynix are already focused on expanding their foundry capacity. Constructing a new memory facility would take four to five years, and companies must weigh the risk of oversupply given their existing memory fabs in South Korea and China.
South Korean memory makers also face intensifying technological competition. Micron is closing the gap not only in standard memory chips but also in advanced DRAM products such as high-bandwidth memory (HBM). The company’s fifth-generation HBM3E 12-layer chips are reportedly more power-efficient than those of its South Korean competitors. Although Micron’s share of the HBM market stood at just 3% last year—far behind SK Hynix’s 65% and Samsung’s 32%—it aims to increase that figure to 25% this year after securing orders from Nvidia. Some analysts even suggest that Micron has surpassed Samsung in certain NAND flash technologies. Market research firm TipRanks noted that Micron is “not shying away from direct competition with Samsung and SK Hynix.”
The foundry sector is also facing headwinds. TSMC dominates the global foundry market with a 65% share, followed by Samsung at 9.3% and China’s Semiconductor Manufacturing International (SMIC) at 6%. TSMC produces a significantly larger volume of chips in the U.S. than Samsung, giving it a competitive edge in supplying American fabless semiconductor firms such as Nvidia and Qualcomm without tariff concerns. Moreover, TSMC is further strengthening its U.S. presence by working with the administration on a potential acquisition of Intel’s foundry business, which would solidify its position in the American market.
