Trump Imposes Tariffs on Polysilicon... Korean Companies on High Alert

15% Tariff Imposed Under Section 232
To Take Effect 120 Days After Official Announcement
Concerns Over Cost Burden for Hanwha Q CELLS and OCI
Attention on Possible Tariff Exemptions

U.S. President Donald Trump signed an executive order on August 6 (local time) imposing tariffs on foreign polysilicon, a key raw material for the semiconductor and solar industries. This measure aims to reduce the United States' dependence on overseas supply chains and boost domestic polysilicon production. Concerns are being raised that Korean companies such as Hanwha Qcells and OCI, which operate local manufacturing plants in the U.S. and use imported polysilicon and related parts, may face higher costs and the burden of supply chain adjustments as a result.

According to Bloomberg News, White House Office Director Will Sharf stated that "This measure is part of a series of trade and tariff actions under Section 232 of the Trade Expansion Act," adding that it is "intended to adequately support U.S. polysilicon manufacturing and protect it from foreign dumping and offshore threats."

Director Sharf explained that President Trump had signed the executive order earlier in the day. However, the full text of the executive order was not released immediately, and the White House did not disclose details such as the tariff rate or which products would be affected.

The Trump administration has been preparing to apply tariffs and minimum import prices on imported polysilicon, as well as impose trade measures on derivative products made using polysilicon, including semiconductors and solar panels.

Previously, Bloomberg News reported that the Trump administration had been considering imposing at least a 15% tariff and introducing a minimum import price system on imported polysilicon and related products. According to the measures later released, a 15% tariff will be imposed on derivative products related to polysilicon, and enforcement will begin 120 days after the official announcement.

U.S. Strengthens Solar Supply Chain...Targeting China

Bloomberg reported that this measure aims to promote domestic production of polysilicon and related products, and to foster the U.S. solar supply chain, which has struggled to gain traction for over a decade.

The United States led polysilicon production through the early and mid-2000s. However, as Chinese companies rapidly rose, by the late 2010s China had become the dominant producer in the global market.

Polysilicon is broadly categorized into semiconductor-grade and solar-grade. High-purity semiconductor-grade polysilicon serves as the starting point for semiconductor manufacturing, which is essential for smartphones, medical equipment, precision-guided munitions, and aircraft control systems. Solar-grade polysilicon, which has relatively lower purity, is used as a key raw material in crystalline silicon solar panels.

The U.S. Department of Commerce launched an investigation under Section 232 of the Trade Expansion Act in July of last year to assess the impact of imported polysilicon and related derivative products on U.S. national security.

The scope of the investigation included not only raw polysilicon but also a broad range of derivative products such as wafers, semiconductors, solar cells, and solar modules. As a result, depending on the specifics of the measures, tariffs or import restrictions could apply to the entire polysilicon supply chain.

Section 232 of the Trade Expansion Act authorizes the president to impose tariffs or restrict imports if they are deemed to threaten national security.

Recently, when the U.S. Supreme Court blocked previous tariff measures based on the International Emergency Economic Powers Act (IEEPA), President Trump began rebuilding the tariff framework using other legal bases including Section 232 of the Trade Expansion Act.

Hanwha Qcells and OCI Closely Watch Scope of Tariffs

A researcher from OCI TerraSus is examining a polysilicon chip. OCI

Korean companies are closely monitoring these measures. In August of last year, the Korean government submitted an opinion to the U.S. Department of Commerce, requesting flexible application of import restrictions on polysilicon and related derivative products, noting that Korean firms are making investments in the U.S. solar and semiconductor industries.

In particular, citing Hanwha Qcells' solar production facility in Georgia and OCI's solar cell investment in Texas, the Korean government requested that these companies be excluded from the scope of tariffs and import restrictions.

Hanwha Qcells procures the polysilicon it uses at its U.S. factories from Malaysia and brings in solar cells made with Malaysian polysilicon from both Korea and Malaysia to the U.S. for local module production.

Hanwha Qcells, while expressing the need to respond to the unfair trade practices of Chinese companies, asked for annual duty-free import quotas of 20,000 tons each for German and Malaysian solar-grade polysilicon.

OCI, which produces semiconductor-grade polysilicon, argued that its supply chain excludes forced labor and foreign entities of concern, and that semiconductor-grade polysilicon meeting fair trade standards should be exempt from regulation. Depending on the tariff rate and scope of the executive order, Korean companies could face increased raw material procurement costs and the burden of restructuring their supply chains.

This content was produced with the assistance of AI translation services.