U.S. President Donald Trump announced plans to impose tariffs on computer chips and semiconductors “in the very near future,” with rates potentially reaching 100%. Speaking to Republican members of Congress on Monday night, Trump criticized the CHIPS Act for subsidizing companies like TSMC, claiming tariffs would force foreign manufacturers to relocate production to the U.S. “The only way you’ll get out of this [tariffs] is to build your plant right here in America,” he said. While TSMC has invested $40 billion in its Arizona factory, most of its production remains in Taiwan, supplying major clients like Apple, Nvidia and AMD.

Trump’s proposal risks significant disruptions to the semiconductor supply chain, which underpins consumer electronics and computing products globally. The plan could drive up costs for U.S. tech companies and consumers while taking years for promised benefits to materialize, as building new fabs and shifting production are long-term processes.

WHY IT MATTERS

Trump’s tariffs will likely extend to South Korean-made chips, which would increase operational costs for Samsung and SK Hynix. These companies rely on global supply chains optimized around production in South Korea and other Asian hubs. Tariffs would force them to increase production at their U.S. facilities, where higher labor costs and regulatory burdens would significantly raise expenses. Additionally, reallocating resources to meet U.S. production demands could disrupt their R&D pipelines and delay advancements in cutting-edge technologies like 2nm chips.

South Korea’s semiconductor industry may also become more dependent on the Chinese market as an alternative to the U.S. However, this shift comes with risks. Selling more chips, particularly advanced chips, to China will likely restrict South Korean firms from accessing U.S. technology under CHIPS Act export restrictions. This would hinder their ability to innovate and compete globally.

Trump’s plan itself faces practical challenges. Building new fabs and training skilled workers in the U.S. takes years, and the global semiconductor ecosystem — including suppliers, materials and expertise — is deeply entrenched in Asia. Disrupting this network will lead to higher consumer prices and supply chain bottlenecks, diminishing the effectiveness of the proposed tariffs in the short term.

South Korea’s options to resist Trump’s tariffs are limited. The country will likely leverage diplomatic channels and lobby U.S. tech giants like Apple and Nvidia, which rely heavily on South Korean semiconductors, to advocate against the tariffs. Domestically, the government will likely continue to strengthen support for its chipmakers through tax incentives, R&D grants and workforce development to retain technological leadership. South Korea may also coordinate with Japan and the EU to push back against U.S. protectionist measures.