South Korea has officially requested that the US take a distinct approach in its ongoing probe into foreign semiconductor technology and related downstream products, the country’s trade ministry announced on Wednesday.
Korea’s Ministry of Trade, Industry and Energy said it submitted its official written opinion on Tuesday to the US administration in response to the US Commerce Department’s national security investigation into imports of semiconductor technology.
In April, Washington embarked on a broad investigation into semiconductor-related imports, including chip components like silicon wafers and chipmaking equipment, as well as downstream products that contain semiconductors, under Section 232 of the US Trade Expansion Act of 1962, which can allow the imposition of tariffs on imports deemed a threat to its national security.
As part of the probe, the Commerce Department is evaluating the “feasibility of increasing domestic semiconductors capacity” in order to reduce reliance on imports and whether additional trade measures, including tariffs, are “necessary to protect national security,” according to a Federal Register notice put online last month.
The Commerce Department is also accepting public comments on the matter.
In the written submission, the Korean trade ministry stressed “the limited national security risk” posed by Korean-made semiconductors and chip-manufacturing equipment.
As home to the world’s top two memory chip makers — Samsung Electronics Co. and SK Hynix Inc. — Asia’s No. 4 economy argued that its chip exports do not negatively impact US national security or its semiconductor supply chains.
Taking this into account, the ministry urged the US to apply a tailored approach to Korean chip technology and related equipment as it considers trade restrictions. The outcome of the investigation could result in US sector-specific tariffs on imported semiconductor products.
While underscoring the existing balance in semiconductor and chip-manufacturing equipment trade between the two countries, Seoul raised concerns in the letter that Washington’s additional trade measures on chip tech imports could have adverse effects on both US investment in its artificial intelligence infrastructure and planned US-based investments by Korean semiconductor firms.
TARIFF-LIBERATION PACKAGE
Separated from the Section 232 probe, the two allies launched formal bilateral negotiations on broader tariff reductions in late April.
At their first meeting, they agreed to pursue what was dubbed the “July Package” – a roadmap to dismantle both reciprocal and sector-specific tariffs, with particular focus on automobiles, semiconductors, shipbuilding and liquefied natural gas (LNG).
However, since the meeting, Choi Sang-mok, one of the main participants in the meeting, abruptly resigned from Korea’s finance minister position due to a domestic political issue, spurring concerns over the continuity of the two countries’ tariff talks.
“The government will continue close consultations with the US at all levels to limit any negative impact on Korean companies as much as possible,” the trade ministry said on Wednesday regarding the US investigation on chip imports.
“We will also maintain close communication with industry stakeholders and come up with countermeasures, while strengthening joint public-private outreach efforts within the US.”
By Sookyung Seo
skseo@hankyung.com
Jennifer Nicholson-Breen edited this article.
