About a year has passed since U.S. President Trump warned of a 100 percent tariff on semiconductors. Advanced memory such as high-bandwidth memory (HBM) avoided the tariff blow. But Samsung Electronics and SK Hynix are left with an "investment bill" worth hundreds of trillions of won. South Korea and the United States agreed in November last year on a "non-disadvantageous treatment principle", but the tasks of legacy memory tariffs and additional investment pressure remain.

A look at the timeline over the past year shows it began in earnest after Trump declared in February last year that he would impose tariffs of 25 to 100 percent on semiconductors. But tariffs on advanced memory were put on hold as Korean-made HBM was highlighted as essential for AI infrastructure at U.S. big tech firms. The Office of the United States Trade Representative (USTR) reviewed a plan in July last year to temporarily suspend tariffs only on "AI strategic materials". Nvidia, Microsoft and Google opposed the move, saying AI server buildout costs would surge without Korean-made high-performance memory.

Full-scale negotiations began in the second half of last year. In November last year, the two countries reached an agreement to lower reciprocal tariffs to 15 percent from 25 percent. A joint factsheet released at the time specified most-favoured-nation treatment for semiconductor tariffs, stating that if the United States reaches a deal with a country that has a larger trade volume than South Korea, South Korea will not receive worse treatment than that.

In practical terms, the first-phase U.S. semiconductor tariff took effect on Jan. 15 this year. According to the Ministry of Trade, Industry and Energy, the first-phase measure imposes a 25 percent tariff on advanced computing chips such as Nvidia's H200 and AMD's MI325X. Memory chips, which Korean companies mainly export, are excluded, limiting the immediate impact.

The issue is the second-phase measure. U.S. Commerce Secretary Howard Lutnick said at a groundbreaking ceremony for Micron's new plant on the 16th of last month, "Every company that wants to make memory semiconductors has two choices. Pay 100 percent, or produce in the United States." Bloomberg reported that beyond building factories, possible tariff-exemption conditions being discussed could include relocating research and development (R&D) centres, partnerships with U.S. universities, and the scale of local hiring.

Taiwan has already concluded a separate agreement with the United States. According to AP, Taiwan, along with TSMC and others, presented an investment package worth $500 billion, about 660 trillion won, and secured a pledge of tariff exemptions. Of that, direct investment is $250 billion and credit guarantees and supply-chain support are $250 billion. TSMC will receive a duty-free quota of up to 2.5 times the plant's production capacity during the construction period of its U.S. factory. After completion, it will continue to enjoy duty-free benefits of up to 1.5 times its U.S. output in addition to production inside the United States.

The United States says "100 percent tariffs or build factories in the United States"... Samsung, SK face pressure for additional investment

Samsung Electronics and SK Hynix currently pledge U.S. investment commitments that are about one-tenth of Taiwan's level. Samsung Electronics plans to invest more than $37 billion, about 54 trillion won, in Taylor, Texas, by 2030. SK Hynix plans to invest $3.87 billion, about 5.6 trillion won, in West Lafayette, Indiana. An analysis says additional investment of several hundred trillion won would be needed to receive exemption benefits at Taiwan's level.

In response, the Center for Strategic and International Studies (CSIS) raised the possibility that the United States could exempt strategic materials such as HBM while imposing high tariffs on legacy memory to induce production in the United States. In that case, Samsung Electronics and SK Hynix would sell cutting-edge chips duty-free, but could lose price competitiveness against Micron in general-purpose chips, which account for a larger share of volume.

The key is the tariff rate on general-purpose memory and the scope of investment recognition. High-performance memory for AI, such as HBM, is likely to be exempted from tariffs as demand from U.S. big tech surges. But legacy DRAM for home appliances and vehicles could face high tariffs on the grounds of protecting Micron. For Samsung Electronics and SK Hynix, losing price competitiveness in general-purpose chips that make up a large share of volume could directly hit earnings.

For now, the government is focusing on easing uncertainty. In January, Trade Minister Yeo Han-koo (여한구) explained, "Because we do not know when and in what form the second-phase measures will be expanded, it is not yet the stage to feel reassured." The Ministry of Trade, Industry and Energy held the first meeting of the "Korea-U.S. Strategic Investment MOU Implementation Committee" on the 13th and stepped up follow-up negotiations. Afterward, Minister Kim Jeong-gwan (김정관) said, "We will prepare without disruption for the implementation of the Korea-U.S. tariff agreement and contribute to easing our companies' trade uncertainty with the United States."