Trump's Tariff Grace Period Sparks Semiconductor Stock Surge

On April 10, 2025, the stock prices of domestic semiconductor companies surged dramatically after U.S. President Donald Trump announced a 90-day grace period for reciprocal tariffs on countries other than China, imposing only a basic 10% tariff. This news sent ripples through the market, particularly benefiting South Korean tech giants like Samsung Electronics and SK Hynix.

As of 9:10 AM on April 10, Samsung Electronics saw its stock price soar by 5.85%, trading at 56,100 KRW, while SK Hynix experienced an even greater increase of 12.97%, reaching 186,400 KRW. This surge in stock prices reflects investor optimism as the announcement alleviated fears over escalating trade tensions and tariffs that had been weighing heavily on the semiconductor sector.

On April 9, during a Truth Social event, President Trump revealed that he would grant a 90-day grace period for reciprocal tariffs on all targeted countries except China. This means that South Korea would only face a 10% basic tariff instead of the previously anticipated 25% reciprocal tariff for the next three months. Trump emphasized that this decision was made in response to the lack of respect shown by China in the global market, stating, "I am raising tariffs on China to 125% immediately due to their lack of respect for the world market."

The announcement had an immediate positive impact on the U.S. stock market, with the three major indices closing sharply higher on April 9. The Dow Jones Industrial Average surged by 2,962.86 points, or 7.87%, to close at 40,608.45. The S&P 500 index rose by 474.13 points, or 9.52%, finishing at 5,456.90, while the Nasdaq index climbed 1,857.06 points, marking a 12.16% increase to close at 17,124.97.

On April 10, the positive momentum continued in the Korean stock market. By 9:24 AM, SK Hynix's stock price had increased by 11.94%, trading at 184,700 KRW, while Samsung Electronics traded at 55,800 KRW, up 5.28%. Other semiconductor-related stocks also showed strong performance, with Mirae Semiconductor hitting its upper limit and Hanmi Semiconductor rising by 9.92%.

Kim Rok-ho, a researcher at Hana Securities, noted the significance of this development, stating, "SK Hynix's stock price had fallen by 23% over the past two weeks due to concerns about tariffs and the U.S. economy, but this could be seen as an opportunity for investors to capitalize on short-term overselling." He added that while negative impacts from tariffs and demand concerns could be felt across all related industries, memory semiconductors might be better positioned due to supply constraints.

Furthermore, Morgan Stanley provided a boost to investor sentiment by upgrading its target stock price for SK Hynix from 150,000 KRW to 230,000 KRW, while also raising Samsung Electronics' target from 65,000 KRW to 70,000 KRW. The investment bank expressed a cautious optimism about the semiconductor industry, indicating that while it is difficult to definitively state that the sector has completely bottomed out, signs of recovery are emerging as the market moves past its downturn.

In its report, Morgan Stanley highlighted the rebound in NAND flash prices due to production cuts and the rise in DRAM spot prices driven by demand related to China's investments in artificial intelligence (AI) equipment and pre-tariff purchase activities. This positive outlook aligns with the growing trend of increased demand for memory products, especially in data centers where AI memory needs are expected to grow significantly.

As SK Hynix continues to expand its operations, it remains a key player in the memory semiconductor market. The company operates production facilities in Icheon and Cheongju in South Korea, as well as in Wuxi and Chongqing in China, and Dalian. Its core products include DRAM, NAND Flash, and MCP, with a recent re-entry into the system LSI sector through its CIS business.

In summary, the announcement of the tariff grace period has not only provided immediate relief to South Korean semiconductor companies but has also reinvigorated investor confidence in the broader market. With the U.S. stock market responding positively and analysts offering optimistic projections, the semiconductor sector appears poised for a potential rebound in the coming months.