Major South Korean companies saw their revenue from the North American market increase by around 20% in 2024, with high-bandwidth memory (HBM) market leader SK Hynix seeing the largest growth. However, potential new tariffs under consideration by US President Donald Trump, including a 25% tariff on all steel and aluminum imports and new tariffs on semiconductors, could come as a significant blow if imposed.
Revenue surge led by semiconductor firms
According to reports from South Korean media outlets Aju News and ET News, the corporate analysis research organization Leaders Index recently analyzed 100 companies from South Korea's top 500 companies by revenue that make their revenue from the North American region public. It found that overall revenue from North America increased 19.5% year over year from KRW262.2 trillion (US$180.47 billion) in the first three quarters of 2023 to KRW313.5 trillion in the first three quarters of 2024.
Semiconductor companies saw the largest revenue growth. SK Hynix's cumulative North American revenue from the first three quarters of 2023 totaled KRW9.7 trillion and more than doubled in the first three quarters of 2024, reaching KRW27.3 trillion. The share of North American revenue in SK Hynix's total revenue also increased from 45.4% to 58.8%, indicating a growing reliance on the North American market.
Samsung Electronics saw a 24% year-over-year increase in its cumulative North American revenue for the first three quarters of 2024, jumping to KRW84.7 trillion. However, the share of North American revenue as part of overall revenue only saw a slight increase from 35.7% in 2023 to 37.6% in 2024.
Industry observers noted that tech giants like Nvidia are mainly purchasing the most advanced HBM3E from SK Hynix, which is the main reason for SK Hynix's significant growth.
Potential tariffs raise concerns
However, US President Donald Trump has indicated that discussions regarding tariffs on imported cars, semiconductors, and pharmaceuticals are underway, which may pose problems for SK Hynix and Samsung. Based on the Trump administration's current direction, semiconductor tariffs are expected to be around 10-25%. The Korea Institute for Industrial Economics and Trade (KIET) predicts that if the US imposes tariffs on semiconductors, South Korea's semiconductor exports will decrease by 4.7-8.3%.
As a result, some analysts believe that Samsung and SK Hynix will have to strengthen their production in the US to reduce the impact of tariffs. At present, both companies have only established wafer foundries and advanced packaging bases in the US. Neither have plans to build memory factories locally, which is their main export.
Securities industry analysts have pointed out that even if Trump imposes tariffs on semiconductors, the US will not benefit. The main reason is that South Korean companies still dominate the memory market. Imposing tariffs will only increase procurement costs and reduce earnings for major US tech companies. Therefore, they believe the likelihood of the US officially announcing semiconductor tariffs is limited.
Based on sales in the third quarter of 2024, South Korean companies had a 75.5% share of the DRAM market, of which Samsung held 41.1% and SK Hynix 34.4%. In the NAND Flash market, South Korean companies had a 55.8% market share, with Samsung holding 35.2% and SK Hynix 20.6%.
Micron Technology, the world's third largest memory maker by share, is a US company; however, the majority of its factories are overseas and would therefore be affected by tariffs.