South Korea and Taiwan Want Leverage on Chip Tariffs
Countries are lining up to negotiate over a major geopolitical and economic warfare tool: semiconductors.
THE GIST
South Korea is throwing $23 billion at its chip industry to get ahead of Trump's next tariff bombshell. With the U.S. set to target electronics and semiconductors, Seoul isn’t waiting to negotiate. It’s moving fast to protect its biggest export and keep its place in the global chip race.
WHAT HAPPENED
On Tuesday, South Korea announced a $23.25 billion stimulus for its semiconductor sector. That’s a 27% jump from last year’s $18.23 billion. The move comes as the U.S. prepares to hit electronics and chips with fresh tariffs, part of Trump’s renewed trade war push.
The urgency tracks. Semiconductors account for 21% of South Korea’s exports, or roughly $141.9 billion. The country is home to Samsung Electronics and SK Hynix, the world’s top two memory chipmakers. If tariffs spike, the fallout lands hard.
Seoul is spending as a preamble to negotiations. Finance Minister Choi Sang-mok is expected to open talks with Washington to minimize the impact on Korean firms. But the government isn’t relying on diplomacy alone. It’s acting now to keep its chip industry competitive as China and Taiwan ramp up their own efforts.
South Korea’s position is tricky. As a key supplier to both China and the U.S., it has to maintain its lead without becoming collateral in a two-front tech war.
WHY IT MATTERS
Semiconductors are now geopolitical assets. They power everything from smartphones to satellites. Countries that control design and manufacturing have leverage over global trade, innovation, and defense. The money is big, but the strategic value is even bigger.
The U.S. has already limited chip exports to China and pulled allies like South Korea, Japan, and the Netherlands into its strategy. Now, Trump’s tariff threat adds a fresh layer of uncertainty to a race that was already overheating.
It’s working. Taiwan just announced it will model the impact of the proposed U.S. tariffs and seek talks with Washington. The U.S. relies heavily on Taiwan Semiconductor Manufacturing Company, which makes high-end chips for Apple, Nvidia, and much of Silicon Valley. If that flow gets taxed, everything downstream slows down.
Trump initially floated a 20% tariff on European electronics. That has been dialed back to 10% for a 90-day pause, but it still spooked investors. The threat is real enough to freeze capital spending and rattle supply chains. South Korea’s quick subsidy response is a hedge against that kind of market freeze.
WHAT'S NEXT
The global chip map is being redrawn. Nvidia plans to invest up to $500 billion to manufacture AI infrastructure in the U.S., including its new Blackwell chips. The CHIPS and Science Act is already funneling billions into Intel and TSMC fabs in Arizona and Ohio.
Europe is pushing back with its €43 billion Chips Act, aiming to double its share of global production by 2030. Singapore and India are also floating semiconductor partnerships, hoping to carve out influence in the reshuffle.
Everyone is moving fast. Everyone is spending big. And with more tariffs on the table, the clock is ticking. The chip war isn’t a metaphor. It’s a line item in national budgets now.
© MOBY TECHNOLOGIES
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