South Korea Just Dropped $23 Billion to Win the Global Chip War
South Korea just escalated the global chip war. The government unveiled a 33 trillion won ($23 billion) stimulus to safeguard its semiconductor crown jewelsSamsung Electronics (SSNLF) and SK Hynix (HXSCL)from mounting tariff risks and intensifying competition out of China. The expanded package, up from 26 trillion won last year, includes low-interest loans and expanded investment capital aimed at keeping the country's chip dominance intact amid rising global subsidies for advanced manufacturing.
Warning! GuruFocus has detected 3 Warning Signs with SSNLF.
The move follows U.S. tariff threats that have already jolted South Korea's auto sector and could soon hammer its tech exports. While semiconductors are temporarily exempt from Trump's sweeping 145% tariff on Chinese goods, they're still under the microscope. Washington has launched new Section 232 probes into both pharma and chip imports, raising fears that national security claims could be used to justify future trade barriers. South Korean officials say they're now in talks with the U.S. to avoid collateral damage.
With the U.S., China, Japan, and the EU all racing to corner the AI chip supply chain, South Korea's play is part defense, part offense. Beyond protecting its chipmakers from rising input costs and regulatory shocks, Seoul is also eyeing AI leadership. It plans to secure 10,000 high-performance GPUs this year alone to boost domestic AI competitiveness. In a world where chips are the new oil, this $23 billion bet signals that South Korea isn't backing down.
This article first appeared on GuruFocus.
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