A senior executive from Samsung Electronics' Device Solutions (DS) division has reportedly visited Washington, D.C., to express the company's concerns regarding US semiconductor tariff policies and upcoming restrictions on AI chip exports.
High-stakes lobbying effort
According to South Korean media outlet Hangyung, Yong Kwan Kim, president of Management Strategy at the DS division, led the discussions with US officials, also addressing subsidy negotiations for Samsung's chip plant in Taylor, Texas.
Kim reportedly conveyed that new semiconductor tariffs would impact not only Samsung but also its allied companies, potentially undermining the US goal of building a robust domestic semiconductor ecosystem and countering China's technological rise. He also raised concerns about the AI chip export ban, which has already led to a KRW500 billion (US$360 million) inventory write-down for Samsung in the second quarter of 2024 due to halted exports of AI chips made for Chinese clients.
Nvidia's canceled orders create ripple effects
Meanwhile, Reuters, citing The Information, reported that despite recent US approval to allow H20 export to China, Nvidia had canceled orders after a heightened US ban in April 2024, which freed up TSMC's reserved capacity. Although the export ban was subsequently loosened, restarting H20 production would take months, and CEO Jensen Huang said in Beijing that the company has no plans to restart production.
Texas project faces uncertainty
Discussions with US officials also covered subsidy adjustments for Samsung's Taylor project. Samsung had committed to a US$37 billion investment in exchange for a US$4.75 billion subsidy. However, with the Trump Administration hinting at renegotiating subsidy terms, uncertainty around the project has grown.
Originally, Samsung planned to build two fabs, an R&D center, and a packaging facility in Texas. Due to reduced CHIPS Act support, Samsung scaled back its investment and canceled the packaging plant.
China operations under threat
Further complicating matters, the US is reportedly considering revoking export waivers for TSMC, Samsung, and SK Hynix for their China-based operations, shifting to a case-by-case approval model. This would affect Samsung's Xi'an facility, its only overseas memory plant, which is responsible for 40% of its NAND flash output.
Article edited by Jerry Chen
