South Korea Confirms Chip Investment Talks With US as Tariff Threat Grows

South Korea has confirmed that semiconductor investment is now on the table in its broader negotiations with Washington, as the US signals it may impose targeted tariffs on chip imports. A presidential official in Seoul acknowledged the talks this week, following a report by Reuters, marking the first official confirmation that chips have become a live issue in the two countries' wider economic dialogue.

The pressure comes despite an arrangement Seoul believed had already settled the matter. Under a deal struck between the two presidents, South Korea pledged $350 billion toward US manufacturing investment in exchange for a promise that its chipmakers would receive tariff terms no less favorable than those given to competitors with similar trade volumes. That clause guarantees parity rather than exemption, meaning Korean firms are protected from being singled out but not from a tariff applied broadly across the industry.

US Commerce Secretary Howard Lutnick has framed Washington's position bluntly, telling chipmakers to build domestically or, as he put it, "pay to enter the greatest market in the world". The message is aimed squarely at Samsung Electronics and SK Hynix, the world's two largest memory chipmakers, whose products have become critical inputs for America's AI infrastructure boom.

Washington has reportedly used Taiwan's TSMC as a benchmark in the talks. An analysis circulating in Seoul this week estimated that Samsung and SK Hynix would need roughly six and a half times more US investment to match TSMC's American manufacturing footprint, a gap driven largely by the economics of memory production, which depends on scale concentrated in fewer, larger facilities rather than the dispersed model used for logic chips.

None of this has slowed domestic expansion. SK Hynix continues a massive buildout of memory fabs at Yongin, and Seoul has separately been discussing a second domestic chip cluster with both Samsung and SK Hynix. SK Hynix has also moved to raise capital directly from American investors through a planned US listing, even as it keeps its production base largely at home.

The negotiations extend beyond semiconductors. The same Seoul official said talks over South Korea's planned nuclear-powered submarine program have stalled, and conceded that separate issues between the two allies are, in the official's words, "sometimes affecting each other." That suggests a chip concession could be weighed against unrelated defense matters rather than resolved on its own terms.

For now, nothing has been finalized. No new investment figures have been disclosed, no tariff rate has been announced, and neither Samsung nor SK Hynix has commented publicly on the negotiations being conducted on their behalf. Given that a memory fab can take years to build and qualify, any settlement reached now would take years to show up in actual production.