Samsung nabs Apple contract as Trump ups tariff threats on chips

U.S. President Donald Trump on August 7 announced a sweeping 100 percent tariff on imported semiconductors — moments after Apple revealed it would source a key iPhone component from Samsung Electronics’ Texas facility.

“We’ll be putting a tariff of approximately 100 percent on chips and semiconductors,” Trump said during a White House event in Washington on August in which Apple announced its investment plans in U.S. manufacturing.

“If you’re building, there will be no charge […] 100 percent tariff on all chips and semiconductors coming into the United States, but if you’ve made a commitment to build or you’re in the process of building, as many are, there is no tariff, OK?”

Apple announced the same day that it would “launch an innovative new technology for making chips, which has never been used before anywhere in the world” in collaboration with Samsung’s Austin plant in Texas.

“By bringing this technology to the U.S. first, this facility will supply chips that optimize power and performance of Apple products, including iPhone devices shipped all over the world,” the company added.

Although Apple did not specify the type of technology, industry observers believe Samsung will be supplying CMOS image sensors (CIS) for the iPhone for the first time. CMOS refers to complementary metal-oxide semiconductor, a type of technology used in digital devices like computer processors and memory chips, and is known for low power consumption and high reliability.

Often described as the “eyes” of smartphones, CIS improves camera resolution and image quality. Until now, Sony had been the exclusive supplier of CIS for iPhones, making this Samsung’s first time providing the sensor.

Sony primarily manufactures its CIS in Japan. By turning to Samsung’s CIS, Apple not only diversifies from a single supplier but also secures a domestic U.S. supply source.

The president did not specify when the tariffs would take effect, but said in a CNBC interview on August 5 that further announcements on item-specific tariffs could come within the next week or so.

Governments in both Korea and Taiwan interpreted Trump’s comments as signaling that their products would be exempt from the full tariff, the reason being that Samsung Electronics and TSMC are already operating large-scale semiconductor plants in the United States — Samsung in Texas and TSMC in Arizona.

Just last month, Samsung’s new Taylor, Texas, fab secured a major order worth $16.5 billion from Tesla for advanced AI chips. With this, the race to dominate domestic chip production in the United States is heating up among companies from Korea and Taiwan — as well as their governments.

Semiconductors accounted for 24.2 percent of Korea’s total exports as of last month, and the figure is rising. Korea’s chip exports to the United States total around $10.6 billion annually, or 7.5 percent of its total.

Samsung Electronics and SK hynix manufacture the vast majority of their memory chips in Korea and China. If steep tariffs are imposed, they will likely take a hit. Higher chip prices could push up costs for finished products such as smartphones and PCs, weakening consumer demand.

Both companies have acknowledged the potential impact of the tariffs during their latest earnings calls.

The Korean government is working to defuse concerns. On August 7, Trade Minister Yeo Han-koo said in an SBS radio interview that “the United States had agreed to grant Korea most favored nation status for semiconductors and biotechnology.”

“Whether the tariff rate rises to 100 or even 200 percent, it won’t matter,” Yeo said. The status means that trade benefits granted to one country must be extended to others equally. Since the United States reportedly settled on a 15 percent tariff in negotiations with Europe, officials speculate that the same rate may apply to Korea’s chip exports.

In a legislative briefing the same day, Taiwan’s minister in charge of the National Development Council, Liu Chin-ching, said TSMC would be exempt from the 100 percent tariff because it has manufacturing facilities in the United States.

Korea’s chip industry is also paying close attention to the fact that Trump’s remarks came during Apple’s investment announcement — an indication that Washington is pressuring major U.S. tech firms to localize their chip supply chains.

Apple unveiled a $100 billion expansion of its U.S. investments, including the launch of its American Manufacturing Program (AMP), designed to build an end-to-end domestic chip supply chain in cooperation with global partners.

“Through AMP, Apple will increase its investment across America and incentivize global companies to manufacture even more critical components in the United States,” Apple said in a press release on August 7.

“With these new partnerships, Apple is leading the creation of an end-to-end silicon supply chain in the United States, with partners in every key aspect of silicon production.”

“If for some reason you say you’re building and you don’t build, then we go back and add it up, it accumulates, and we charge you at a later date. You have to pay, and that’s a guarantee,” Trump also warned during the White House event.

Meanwhile, SK hynix is pursuing a plan to build a high bandwidth memory (HBM) packaging and research and development facility in West Lafayette, Indiana. Currently, the company performs most of its HBM final packaging in Korea, but is exploring a model in which intermediate products are shipped to the United States for final processing. This strategy could allow SK hynix to complete HBM production on U.S. soil and avoid potential tariffs.

BY PARK HAE-LEE  [shin.minhee@joongang.co.kr]