A New Ghost Story in Storage: Is the US Going to Seize Funds?

The demands from the United States on Korea's semiconductor industry are escalating from "building factories" to "sharing profits."

On Friday, according to The Korea Times citing people familiar with the matter, Rick Switzer, deputy representative of the U.S. Trade Representative’s Office, made it clear in a meeting last month with Korea’s Minister for Trade, Yeo Han-koo, that the U.S. side has the right to share in the massive profits of SK Hynix and Samsung Electronics, arguing that the substantial procurement by American companies has directly fueled the profit growth of Korea’s chip makers. While this statement has yet to be officially confirmed by the U.S., it has already attracted significant attention within Korea's industries and government.

The backdrop to this trend is that Korea’s semiconductor exports to the U.S. surged by more than 90% year-over-year in the first half of this year, with Korean memory companies continuing to secure large profits in the global AI industry chain.

A research note from CITIC Securities pointed out that from a historical perspective, when overseas companies continuously achieve high shares or high profits in key industries, it often triggers political intervention by the U.S. government, accelerating the global redistribution of industrial interests. Both the Japanese semiconductor case in the 1980s and the Taiwanese panel industry in the 2000s stand as cautionary tales.

U.S. Logic: Contribution through Procurement Entitles Sharing in Profits

According to The Korea Times citing a source familiar with the matter, during the meeting Rick Switzer told Yeo Han-koo that U.S. companies’ large-scale procurement of Korean semiconductors directly fueled the profit growth of Korean chip makers, and thus the U.S. side should have the right to share in these profits as well.

"The U.S. logic is that if Korean domestic partners have the right to a share because they contributed part of the profits, then American corporations should be entitled to the same," the source said. A senior Korean government official also confirmed to The Korea Times that the U.S. had indeed made such a claim but provided no further details.

The Korea Times repeatedly reached out to the U.S. Trade Representative’s Office, the Commerce Department, and the Treasury for comment, but received no response. An official from Korea’s Ministry of Trade, Industry and Energy said they were not aware of the matter, and reiterated that Korea’s basic stance remains that “industry-related matters should be advanced on the principle of commercial rationality.”

Historical Lessons: High Profits Often Trigger Political Intervention

A CITIC Securities research note reviewed two typical cases that shed light on the U.S. government’s pattern of action in similar scenarios.

• Japanese Semiconductors (1980s): As Japan’s semiconductor industry rapidly ascended and squeezed out American industrial advantages, the U.S. government, under pressure from business and industry associations, imposed tariffs, initiated Section 301 investigations, enforced the U.S.-Japan Semiconductor Agreement, and even levied 100% punitive tariffs on Japan. Policy shocks compounded the bursting of Japan’s economic bubble, which eventually pushed the redistribution of shares and profits in the global semiconductor industry. Notably, the market share Japan lost did not return to the U.S.; instead, with policy support, Korea emerged as the ultimate beneficiary.
• Taiwanese Panels (2000s): In 2006, Taiwan’s share of large-size LCD panel shipments topped the world. That same year, the U.S. Department of Justice launched an antitrust investigation on the grounds of price manipulation, with major Taiwanese panel makers collectively paying over $800 million in criminal fines and several executives facing jail time. Policy shocks, along with the financial crisis and industry downturn, ultimately shifted shares and profits in the panel industry toward mainland China.

CITIC Securities highlighted a common pattern: once the high profits of overseas businesses are redefined by the U.S. government as detrimental to U.S. industry competitiveness, political intervention will follow, often through a coordinated use of trade, industrial, or antitrust tools.

Current Landscape: Supply Priority, Political Pressure Not Yet Formed

CITIC Securities believes that the key to judging whether the high profits of Korean memory industries will trigger U.S. government intervention lies in understanding the mechanisms behind its technology and economic policy-making.

At present, U.S. policy is still led by core White House teams such as those under Trump and Besant. Meanwhile, as right-wing technology influencers like Michael Kratsios and David Sacks gain traction, American tech giants are exerting growing influence over the policy agenda. Once the White House core circle finalizes its interpretation of the issue, departments such as Commerce, USTR, the Justice Department, and FTC routinely carry out the relevant trade, industrial, or antitrust measures.

As things stand, with AI demand still strong, American businesses are more focused on securing memory supply than on pushing down the prices and profits of Korean firms. On the political front, there is a tendency to combine “MAGA” with technology industrial policy—encouraging Korean companies to expand production in the U.S. to boost manufacturing, employment, and supply chain repatriation. While some voices of opposition to higher Korean memory prices have emerged among U.S. policymakers, industry groups, and consumers, systemic political pressure has yet to materialize.

Risk Threshold: Cost Pass-through Capacity Is a Key Variable

CITIC Securities notes that as long as memory costs can still be passed on to downstream buyers, price hikes are more easily seen as part of the AI boom, with limited motivation for political intervention. But if prices keep rising and significantly erode profits and ROI for American firms, the U.S. government could redefine Korea’s high memory industry profits as harming the competitiveness of U.S. AI firms.

The research note recommends monitoring two signals in particular: First, whether U.S. tech giants shift from securing supply to publicly opposing price hikes; second, whether policymakers shift from securing supply and encouraging U.S. expansion to intervening on grounds such as “monopoly,” “price manipulation,” or “supply chain security.”

Rick Switzer’s recent remarks may be an early sign that this potential risk is becoming manifest. For SK Hynix and Samsung Electronics, the U.S.-Korea semiconductor contest is quietly evolving from manufacturing localization to the distribution of profits.