U.S. demands toward South Korea’s semiconductor industry are being described as moving beyond calls for local plant expansion and toward profit sharing.
According to The Korea Times, cited in the PANews report, Deputy U.S. Trade Representative Rick Switzer told Korean Trade Minister Yeo Han-koo in a meeting last month that the United States had the right to share in the large profits earned by SK hynix and Samsung Electronics. The reasoning, according to people cited by the report, was that large-scale purchases by U.S. companies directly drove profit growth at Korean chipmakers. The statement has not been officially confirmed by the U.S. side, but it has already drawn attention from South Korean industry and government circles.
The backdrop is a sharp rise in South Korea’s chip exports to the United States. The report said semiconductor exports to the U.S. jumped by more than 90% year over year in the first half of this year, while Korean memory makers continued to capture sizable profits in the global AI supply chain. A research note from CITIC Securities, also cited in the report, said that when overseas companies maintain high market share or high margins in key industries, that often draws political intervention from Washington and speeds up a redistribution of industry profits.
U.S. argument centers on procurement-driven profits
The Korea Times, citing an industry source familiar with the matter, said Switzer told Yeo Han-koo that heavy U.S. purchases of Korean semiconductors had directly contributed to the profit growth of Korean chip companies, and that this gave the United States grounds to share in those gains.
According to that source, the U.S. view was that if local Korean partners could claim a share of profits because they had contributed to creating them, then U.S. companies should have the same right. A senior South Korean government official also confirmed to The Korea Times that the U.S. side had made that argument, though no further detail was provided.
The Korea Times said it contacted the Office of the U.S. Trade Representative, the U.S. Commerce Department, and the U.S. Treasury Department for comment, but did not receive a response. An official at South Korea’s Ministry of Trade, Industry and Energy said the ministry was not aware of the matter and repeated Seoul’s basic position that industry-related issues should be handled according to commercial reasonableness.
CITIC Securities points to two historical examples
The CITIC Securities note reviewed two cases that it said help explain how the U.S. government has acted in similar situations.
Japan semiconductors in the 1980s
According to the note, after Japan’s semiconductor industry rose quickly and kept eroding the competitive position of U.S. firms, Washington, backed by business groups and industry associations, applied pressure through tariffs, Section 301 investigations, the U.S.-Japan Semiconductor Agreement, and 100% punitive tariffs. The policy shock, combined with the collapse of Japan’s bubble economy, led to a reallocation of global semiconductor share and profits.
The note added that the market share lost by Japan did not return to the United States. South Korea, helped by policy support, became a major beneficiary instead.
Taiwan LCD panels in the 2000s
The research note said Taiwan’s share of large-size LCD panel shipments briefly ranked first in the world in 2006. In the same year, the U.S. Department of Justice opened an antitrust investigation on price-fixing grounds. Major panel makers in Taiwan ultimately faced more than $800 million in criminal fines, and several executives received prison sentences. Combined with the financial crisis and an industry downturn, the shock pushed global panel market share and profits toward mainland China.
CITIC Securities said the common pattern in both cases was that once high profits earned by overseas companies were recast by Washington as harmful to U.S. industrial competitiveness, political intervention followed. In those episodes, trade, industrial, and antitrust tools were often used together.
At this stage, supply matters more than pricing pressure
CITIC Securities said the key question is whether high profits among Korean memory makers will become a trigger for direct U.S. government action. That depends on how U.S. technology and economic policy is being shaped.
The note said policy is still being led by White House core figures including Trump and Bessent. At the same time, the growing influence of tech-right figures such as Michael Kratsios and David Sacks has increased the role of major U.S. technology companies in setting the policy agenda. Once an issue is defined at the White House level, agencies such as the Commerce Department, USTR, the Justice Department, and the Federal Trade Commission typically move through trade, industrial, or antitrust channels.
For now, with AI demand still strong, U.S. companies are more focused on securing memory supply than on pushing down Korean pricing or margins. Politically, the report said, the preference has been to combine MAGA goals with industrial technology policy by encouraging Korean companies to expand manufacturing in the United States, bringing back jobs, industrial capacity, and parts of the supply chain. There have already been scattered objections to rising Korean memory prices from politicians, industry groups, and consumers in the United States, but no broad and organized political pressure has formed yet.
The risk line is whether higher prices start hurting U.S. profits
CITIC Securities said the turning point lies in cost pass-through. As long as higher memory costs can still be passed along downstream, price increases are more likely to be treated as part of the broader AI upcycle, limiting the incentive for policy intervention.
If prices keep rising and begin to materially squeeze the profits and investment returns of U.S. companies, however, the high profitability of Korean memory suppliers could be reframed as damaging U.S. AI competitiveness. The note said two signals are worth watching closely:
- whether major U.S. technology companies shift from locking in supply to openly opposing price increases;
- whether policymakers move away from supply security and U.S. factory expansion and start intervening under labels such as monopoly, price manipulation, or supply chain security.
The report said Switzer’s remarks may be an early sign that this risk is moving from a latent issue into a visible one. For SK hynix and Samsung Electronics, the U.S.-South Korea semiconductor dispute may no longer be limited to manufacturing localization. It may also be extending into how profits are divided.