Amid expectations that the U.S. government will disclose item-specific tariffs, including semiconductors, by next week, the domestic parts industry is closely monitoring the situation.

While Samsung Electronics [005930] and SK Hynix [000660] are likely to be exempted from the "100% tariff on semiconductors" mentioned by President Trump, the risk of a tariff bombshell on finished products such as smartphones and PCs remains, raising concerns about the burden of price reductions being passed on to the parts industry.

According to industry sources on the 10th, the U.S. Department of Commerce is expected to announce item-specific tariff rates, including semiconductors, by next week, based on the results of its ongoing investigation under Section 232 of the Trade Expansion Act.

Fortunately, Samsung Electronics and SK Hynix, which are currently making semiconductor-related investments in the U.S., are likely to be exempted from semiconductor tariffs.

President Trump stated on the 6th (local time) at the White House that "approximately 100% tariffs will be imposed on all integrated circuits (chips) and semiconductors entering the U.S."

However, the U.S. government explained that tariffs will not be imposed on companies building semiconductor production facilities in the U.S. during President Trump's term.

Samsung Electronics semiconductor factory under construction in the U.S. (Seoul=Yonhap News) Exterior view of the Samsung Electronics semiconductor factory under construction in Taylor, Texas, U.S. 2025.2.14 [Provided by Samsung Electronics. Reproduction and redistribution prohibited.] 

Samsung Electronics is constructing a foundry (semiconductor contract manufacturing) plant in Taylor, Texas. SK Hynix also plans to build a high-bandwidth memory (HBM) packaging plant in Indiana, aiming for operation in 2028.

President Trump's term extends until January 20, 2029.

However, the domestic electronics parts industry, including displays, remains on edge due to the announcement of item-specific tariffs. This is because finished electronic devices equipped with semiconductors, such as smartphones and PCs, are also subject to the Department of Commerce's investigation.

If item-specific tariffs are imposed on smartphones, PCs, etc., it is inevitable that the profitability of set manufacturers such as Samsung Electronics and LG Electronics [066570] will worsen. Parts manufacturers are concerned that the increased cost burden on their clients will lead to pressure for lower component prices.

Lee Cheong, CEO of Samsung Display, stated on the 7th, "If the product prices of set (finished product) companies increase due to U.S.-origin item tariffs, there may be downward pressure on prices for various parts suppliers, including displays, so we are closely monitoring the situation."

If product prices rise due to tariff imposition, it is highly likely that consumer sentiment, which is already frozen, will further contract.

LG Innotek's Hai Phong production facility in Vietnam [Provided by LG Innotek. Reproduction and redistribution prohibited.]

As the global tariff war originating from the U.S. is expected to continue for the time being, the parts industry is closely watching the supply chain strategies of major set manufacturers such as Samsung, Apple, and LG.

An official from the electronic parts industry said, "Recently, Apple has also announced large-scale investment plans in the U.S. and is trying to increase its production proportion within the U.S., indicating ongoing supply chain restructuring," adding, "Domestic companies supplying key components such as displays and camera modules are also considering adjusting the proportion of production by country to respond."

The domestic parts industry has already experienced significant difficulties due to retaliatory tariffs imposed by the U.S. government on various countries.

Samsung Electro-Mechanics [009150] had previously put its local plant construction plans on hold after the U.S. government announced a 30% tariff bombshell on Mexico. Subsequently, Mexico has been applying a 25% tariff after receiving a 90-day grace period.

A state of emergency was declared for Vietnam, where domestic parts manufacturers such as LG Innotek [011070] and Samsung Display have their main production bases, when a 46% tariff was announced. Subsequently, Vietnam succeeded in reducing this to 20% through negotiations.

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