Washington Tells Samsung and SK Hynix to Build: No Rule Exists Yet

At the G20 Innovation Ministerial in Chapel Hill, North Carolina, on September 2, Commerce Secretary Howard Lutnick summed up the next shape of the chip tariff to CNBC:

"If you build here, you don't pay, but if you don't build here, expect to pay to enter the greatest market in the world."

Lutnick named no company. The next morning the Seoul papers supplied them: Samsung Electronics and SK hynix.

Between them they hold 63% of the global DRAM market, and neither makes memory inside the United States.

What the January Rule Actually Covers

Proclamation 11002 placed a 25% duty on certain advanced compute chips and explicitly called the step "Phase 1", opening lines 9903.79.01 and 9903.79.02 in the tariff schedule. The scope is narrow: only logic chips clearing set compute-performance and memory-bandwidth thresholds, such as Nvidia's H200 and AMD's MI325X.

Six exemption categories were defined, including data centers and research.

The DRAM and NAND that Samsung and SK hynix sell into America fall outside this duty today. When headlines say Washington has targeted them, no instrument lands on that target.

The report Commerce had to finish by July 1 was completed but unpublished as of August 30. The Federal Register carries no notice, rate, exemption structure or timetable.

Why the Exemption Is Not an On-Off Switch

Lutnick also said where the design would come from:

"We gave tariff relief to companies who built their innovative pharmaceuticals in America and did MFN. So that's what you should look for in semiconductors."

Pharmaceuticals has three tiers. With no agreement, patented drug imports pay 100%.

A Commerce onshoring agreement cuts that to 20% through April 2, 2030. A most-favored-nation pricing agreement on top takes it to 0% through January 20, 2029.

Zero takes two signatures at two agencies.

The chip equivalent of that second signature is undefined: memory contracts are negotiated quarterly, there is no government buyer, and Commerce has not said what replaces MFN.

The mechanism that matters is in January's Taiwan agreement. There the exemption is not a yes or no but a quota.

Duty-free imports run up to a multiple of existing American capacity: 2.5 while a plant is building, 1.5 once finished.

"the U.S. will grant Taiwan the most favorable treatment: zero tariffs within the quota."

The Arithmetic: One Duty, Three Different Bills

The announced rate is identical for all three; the effective rate is not. It equals 25% times (1 minus 1.5 times American capacity divided by American shipments).

A tariff built this way is an investment threshold, not a tax. The effective rate lands in cost of goods sold and pulls gross margin down (How to Read a Balance Sheet).

Where Korea Stands

Samsung's American investment, including the Taylor, Texas foundry, and SK hynix's Indiana site come to $41B together — against TSMC's Arizona commitment alone, and Micron's through 2035.

SK hynix's Indiana site packages high-bandwidth memory stacks rather than fabricating them, and Samsung's Texas plant does foundry work, not memory. What is installed in America is the back end of the chain.

The administration puts construction commitments announced since it took office at $1.2 trillion, with no new Samsung or SK hynix line inside it. Samsung held 38% of the second-quarter DRAM market and SK hynix 25%, the latter down four points in a year. The two selling the most memory into America make the least inside it.

What the Market Did

Thursday, September 3 brought a sharp afternoon sell-off in Seoul; the presidential office said talks were live and details unsettled. The Kospi recovered to close up 0.26% at 6,579.48, Samsung Electronics down 0.2% and SK hynix 1.05%. The two companies named in the headlines moved about one percent.

The side that manufactures in America is at the other end: Micron rose 4.2% on September 4, and Western Digital the same. The catalyst was employment: August nonfarm payrolls came in at 162,000 against expectations near 55,000.

Odds of a September rate increase moved to 58%, and the Dow fell 0.5%, the S&P 500 0.4%, the Nasdaq Composite 0.3%.

What Is Left

Three things exist today: a narrow Phase 1 rule that does not cover Korean memory, an unpublished Commerce report, and a logic described on camera. The fourth — a text writing the quota and the rate — does not exist.

Three dates matter: whether a second-phase notice appears in the Federal Register, whether the July report is released, and December 31, 2026, when the 35% manufacturing investment credit expires. If Congress does not extend it, a company answering the call to build in America breaks ground without the incentive.

This piece draws on the Korea Herald and Seoul Economic Daily accounts of Lutnick's September 2 CNBC interview, the text of Proclamation 11002 as published in the Federal Register, Tom's Hardware's account of the Taiwan agreement's quota structure, and closing data from the Seoul exchange on September 3. Rates, scope and timing for the second phase rest on no official document as of today, and that distinction is preserved throughout.

Correction (September 13, 2026): prose tightened for rhythm; figures and sources unchanged.