Lutnick Threatens Chip Tariffs, Says Companies Must Build in US or Pay

Cites TSMC, Micron

Pressure Also Mounts on Samsung, SK hynix to Expand US Investment

US Commerce Secretary Howard Lutnick reiterated his commitment to imposing tariffs on semiconductors.

Speaking on Bloomberg TV on September 2, Lutnick said the Trump administration has repeatedly told chipmakers that products made in the US would face no tariffs. Companies unwilling to begin construction in the US would have to pay to access the world’s largest market, he said. A targeted and carefully designed tariff policy will be unveiled soon, he added.

Lutnick also said a Politico report that the US government is pursuing broad semiconductor tariffs was accurate. Washington reduced tariffs for companies that manufactured innovative drugs in the US and adopted a most-favored-nation policy there, he said. The same approach should be expected for semiconductors.

The US said in January, when it signed a trade agreement with Taiwan, that semiconductor companies building production facilities in the US would receive tariff exemptions covering 2.5 times their planned output. After those plants are completed, the exemption would apply to as much as 1.5 times output.

When the Bloomberg TV host said the semiconductor tariff plan amounted to a warning for Samsung and SK, Lutnick said they should understand that they will build plants in the US. He said he did not know whether the facilities could be completed on time during the Trump administration, but construction could at least begin.

Samsung Electronics is building a foundry plant in Taylor, Texas. SK hynix broke ground late last month on a high-bandwidth memory, or HBM, packaging facility in Lafayette, Indiana. But there are no US plants producing memory semiconductors such as DRAM and HBM.

Lutnick said tariff pressure could help bring the semiconductor industry to the US. America’s share of semiconductor production was less than 2% but is now heading toward 40%, he said. If Intel succeeds, that figure could reach 50% by the end of the Trump administration. He also said the US has already secured $1.2 trillion in construction commitments, including $265 billion from TSMC and $250 billion from Micron, bringing the two companies’ total to more than $500 billion. He added that Taiwan would announce another $20 billion to $30 billion investment plan as soon as next week.

Lee Sang-eun, Washington correspondent, Korea Economic Daily, selee@hankyung.com