SEOUL, Mar. 6 (Korea Bizwire) — The latest protectionist trade policies being pursued by U.S. President Donald Trump should not pose immediate problems for South Korean chipmakers, industry watchers here said Tuesday, although companies need to be prepared for unexpected developments.
“As (memory chips) are intermediary goods, it is unlikely that (the chip industry) will face heavy tariffs as such a move can impact the cost of final products,” said Mun Byung-ki, a researcher at the Korea International Trade Association (KITA).
The rising demand for big data, cloud computing and Internet of Things solutions around the globe will also make chips play more important roles in the global IT industry going forward. This can make it harder for the U.S. to erect new trade barriers for semiconductors.
Experts, in addition, said the size of the U.S. market for South Korean semiconductors has been declining over the past years.
In 2000, the U.S. accounted for 30.4 percent of South Korea’s exports of chips, while the figure plunged to 3.4 percent in 2017, the latest data by KITA showed.
Instead, exports to China shot up and have since become the biggest buyer of South Korean chips by taking up 40.2 percent of all shipments last year. This was trailed by Hong Kong, Vietnam and Taiwan at 27.7 percent, 9.4 percent and 4.5 percent, respectively.
Experts, however, said the South Korean industry still needs to keep a watchful eye on trade-related developments.
“Taking the nature of the industry and the market into account, the U.S. government is unlikely to immediately come up with a so-called tariff bomb,” an industry insider said.
“But with unexpected situations occurring, we can only hope that the chip industry will not be embroiled in the trade discord between Seoul and Washington,” the source added.