South Korea Unveils $23Bn Chip Boost Amid Tariff Jitters, Samsung Rallies

Amid rising uncertainty due to US tariffs, South Korea announced a support package of $23.25bn (33trn won) for its semiconductor industry. This came after US President Donald Trump took a U-turn and said that he would impose a tariff rate on imported semiconductors soon.

The measures from Seoul come in response to calls on the government to expand support at a time of growing policy uncertainty under the current US administration and rising competition from Chinese rivals, the government said in a statement. The joint statement from various ministries also stated that it will further ramp up a financial assistance programme for the chips industry to 20trn won, versus the previous 17trn won.

As part of its new measures, the government will also offer subsidies for building underground power transmission lines to semiconductor hubs. It also plans to raise its share of infrastructure funding in advanced industrial complexes from 30% to 50%. The semiconductor companies will receive a low-interest loan of 20trn won between 2025 and 2027 as compared to the current 17trn won.

South Korea, home to leading chipmakers like Samsung Electronics and SK Hynix, relies heavily on semiconductors as a core export. On Tuesday, its benchmark Kospi (Korea Composite Stock Price Index) rose by 0.68%, with Samsung shares up 1.07% and SK Hynix gaining 0.17%.

Seoul's Semiconductor Exports

In 2024, of its $683.6bn exports, semiconductors contributed $141.9bn or 20% share. In the same year, South Korea's export to the US, its second largest export market, witnessed a 10.5% year-on-year growth to hit to record $127.8 billion—marking the seventh straight year of growth.

In a social media post on Monday, Trump said that he would investigate the whole electronics supply chain on national security grounds. On the other hand, the US Department of Commerce also vowed to initiate an investigation “to determine the effects on national security of imports of semiconductors, semiconductor manufacturing equipment, and their derivative products.”