On 7 September 2026 the Korea–US Strategic Investment Steering Committee resolved to make a 6.3 gigawatt gas-fired power complex in Encinal, Texas the first project funded out of Korea’s 350 billion dollar investment commitment to the United States. It costs about 22 billion dollars, or 30 trillion won. The instinctive question for a foreign holder of Korean equities is which listed company just took on that obligation, and the answer is none. The money moves through a state vehicle. What the package is meant to buy is a tariff ceiling — and the tariff everyone is pricing against is narrower than its headline suggests.
Last verified: 17 September 2026. Built from the Section 232 semiconductor proclamation of 14 January 2026 as analysed by White & Case, from Korean government briefings reported on 7 and 8 September 2026, from The Korea Times report of the industry minister’s remarks of 4 September, from Korean reporting of the Washington meetings of 23 and 24 July, from the Federal Reserve’s FOMC statement of 16 September, and from Seoul closing prices of 16 September. The proclamation and the FOMC statement are documents and will hold. Everything about the Texas project reached the public through briefing rather than filing, no listed issuer has disclosed an obligation, and the project has not received final approval.
Editor’s opinion
The tariff being priced is not the tariff that exists
Our view is that the widely repeated line — that the United States has been charging 25 per cent on Korean chips since January and that the investment package is buying relief from it — is wrong on the first half and therefore misleading on the second. The January action is real, but it reaches a very narrow category of logic parts, and memory made by Samsung Electronics and SK hynix is not in it.
What the package is actually buying is position in a rate that has not been set. Commerce Secretary Howard Lutnick said on 4 September that the administration is considering linking semiconductor tariff rates to how much a company invests in United States manufacturing. If that is the design, then the number that matters to Korean memory earnings is not the January 25 per cent but a future rate, determined partly by a comparison between what Korea has committed and what Taiwan has committed. A gas plant in Texas is a strange instrument for that purpose, and it is still an instrument for that purpose.
The practical consequence is a change in what to watch. Not the January proclamation, which is settled and does not touch Korean memory. The broader Section 232 semiconductor action that has been signalled but not published, and the investment-linked mechanism Lutnick described.
Andrew Lee. This section argues a view rather than establishing a fact. It is not a forecast and not a recommendation, and the material it draws on is listed in the sources below.
What was decided on 7 September
The Korea–US Strategic Investment Special Act took effect in June 2026, creating the legal vehicle for the 350 billion dollar package agreed with the Trump administration. Capital flows through a state investment corporation and its fund rather than off any company’s balance sheet, and it is drawn down as construction requires it rather than committed in a single tranche. That structure is the reason the first project can be this large without appearing in anybody’s accounts.
The project is a 6.3 gigawatt combined-cycle complex at Encinal, Texas, built in two stages: a 1.4 gigawatt gas turbine phase first, then a 4.9 gigawatt combined-cycle expansion. The price was negotiated. Korean reporting has Seoul opening at about 20 billion dollars and Washington pushing for 25 billion, with 22 billion as the landing zone, and the won budget rising from 27 trillion to 30 trillion before the National Assembly briefing.
The approval chain, and what is queued behind it
Korea’s 350 billion dollar package as at 17 September 2026, on government briefings and National Assembly reporting
| Stage | Status |
|---|---|
| Korea–US Strategic Investment Steering Committee | Resolved 7 September 2026 in favour of the Texas project |
| Korea–US Consultative Committee | Pending |
| United States investment committee | Pending |
| Presidential sign-off | Pending |
| National Assembly consent | May be triggered if commercial reasonableness standards are not met |
| Projects behind it | Carbon capture and spent nuclear fuel recycling, both reported as less commercially attractive than the first; separately, up to eight large reactors mixing the Korean APR1400 and the American AP1000, reported at about 15 billion dollars each |
The reactor track is the one worth keeping in view. Eight units at the reported unit cost would come to roughly 120 billion dollars, more than five times the Texas project and a third of the entire package. It is at a much earlier stage and none of it is committed.
The 25 per cent tariff is narrower than its headline
This is where most coverage of the package goes wrong, and it is checkable against the proclamation rather than against anybody’s summary of it. The Section 232 semiconductor action was proclaimed on 14 January 2026 and took effect the following day at one minute past midnight Eastern time, at 25 per cent. It applies to logic integrated circuits under three tariff subheadings that also meet narrow technical thresholds, defined by total processing performance and memory bandwidth together. The bands were drawn to catch Nvidia H200 and AMD MI325X parts imported for security testing before re-export. Seven end-use exceptions carve out chips destined for American data centres, repairs, research, startups, consumer electronics, industry and the public sector.
What the January action does and does not reach
Section 232 semiconductor proclamation of 14 January 2026, effective 15 January
| Question | What the proclamation says |
|---|---|
| Rate | 25 per cent |
| Scope | Logic integrated circuits under three tariff subheadings meeting defined processing-performance and bandwidth thresholds |
| Intended targets | Advanced accelerators such as the Nvidia H200 and AMD MI325X, imported for security testing before re-export |
| Memory: DRAM, NAND, high bandwidth memory | Not covered |
| Exceptions | Seven end-use carve-outs, including American data centres and domestic manufacturing of derivative products |
| Country ceilings | None in the proclamation |
Korean memory makers carry no direct burden under this measure. Nvidia and AMD manufacture through TSMC and buy Korean memory as a component, so the duty lands on a finished part that is not Korean. The proclamation itself contains no country ceiling of any kind, which is worth holding in mind when reading the next section.
What was published alongside the January measure is the part that should have drawn attention: a signal that broader tariffs on semiconductors and on products containing them may follow, paired with offset programmes meant to reward domestic manufacturing. An industry official quoted at the time put the position plainly, that there was no direct tariff impact yet and no way to predict how it would develop. Eight months later that is still the situation.
What the 15 per cent ceiling actually covers
The ceiling is the asset Korea is trying to protect, and it is more specific than the shorthand suggests. On 23 and 24 July 2026 the industry minister Kim Jung-kwan and the trade negotiation representative Yeo Han-koo went to Washington and met Commerce Secretary Howard Lutnick and the United States Trade Representative Jamieson Greer. Korean reporting of those meetings has Seoul stating that the combined total tariff rate on Korean goods, counting the Section 301 forced labour and overcapacity actions, should not exceed 15 per cent under the trade agreement, and has the American side reconfirming that it must honour that agreement.
The same reporting contains a qualification that rarely travels with the headline. Goods already subject to Section 232 duties — semiconductors, automobiles and steel — were excluded from the Section 301 forced labour measure in question. A ceiling that is framed around the Section 301 stack does not automatically bind a Section 232 rate, and the January proclamation, as noted, contains no ceiling at all. Whether the 15 per cent figure governs a future semiconductor action is a matter of interpretation of the trade agreement, not something either government has published a rule about.
One more attribution is worth getting right, because it is quoted loosely. The phrase that Korean semiconductors will be treated no less favourably than competitors’ comes from a joint fact sheet published in November, not from a minister’s promise this month. On 4 September Kim Jung-kwan said only that he believed the two countries were continuing discussions in that spirit, and that the outstanding issues on the first investment project could be concluded within September. That is a statement about the tone of a negotiation, not a commitment about a rate.
The design that turns a gas plant into a chip story
On 4 September Lutnick confirmed the administration is considering linking semiconductor tariff rates to the scale of a company’s investment in United States manufacturing, and that any such measure could extend beyond chips to products containing them, including laptops, games consoles and data centre servers. No rates and no thresholds have been published. The nearest thing to a template is the existing Taiwan arrangement, under which a company building in the United States receives a duty-free import quota of two and a half times its planned American capacity during construction, falling to one and a half times once production begins.
If that is the shape of the thing, the comparison that determines Korea’s rate is not Korea against a fixed schedule but Korea against Taiwan. TSMC has announced 265 billion dollars of American investment. Samsung and SK hynix both have American operations and neither has published a figure on that scale, and neither has any assurance that production in Korea would be exempted. That is the mechanism by which a package of state investments, including a gas plant that has nothing to do with semiconductors, becomes a semiconductor story. It is not that the plant makes chips. It is that the total is the number being compared.
Three risks, held by three different parties
The capital risk is sovereign. The 22 billion dollars sits with the state vehicle, there is no disclosed listed-company equity commitment, and no Korean construction or turbine name has been identified in any filing. Anyone trading a Korean industrial name on the theory that it has just won 22 billion dollars of work is trading on an inference. There is no filing to read, which is unusual for a number this size; our guide to reading Korean filings will not help here, because nothing has been filed.
The earnings risk is corporate, and it is contingent on a rate that does not yet exist. If a broader semiconductor action arrives at or under the ceiling Korea is arguing for, the tariff line in Samsung, SK hynix and Hyundai Motor models stays roughly where consensus has it. If it arrives above, the effect is immediate and it is to gross margin, at the two companies that dominate foreign ownership of the Korean market.
The third risk is macro, and the timing here needs care because the sequence is easy to get backwards. On 16 September the won closed at 1,368.6 to the dollar, weaker by 9.2 won or 0.68 per cent, a fifth consecutive session of depreciation, while the KOSPI closed at 6,717.97, up 1.37 per cent on bargain-hunting in semiconductors. Those closes came before the Federal Reserve acted, not after. Later that day in Washington the FOMC raised its target range by a quarter point to between 3.75 and 4 per cent on a unanimous 12 to 0 vote, the first increase since 2023, with the statement saying inflation remains elevated and that the action would support a timelier return to the 2 per cent goal. Programmed dollar outflows into a tightening cycle is an uncomfortable combination for the currency, and for an unhedged foreign holder of Korean equities the currency is half the return.
What would settle this
The broader Section 232 semiconductor action is the document to wait for. Until it is published, the rate applied to Korean memory is a negotiating position rather than a number, and any model that carries a tariff assumption for Samsung or SK hynix is carrying an assumption about an unpublished rule.
On the project itself, three gates remain: the Korea–US Consultative Committee, the American investment committee and a presidential decision, with National Assembly consent in reserve if the commercial reasonableness standard is not met. Korean outlets have reported that a first remittance of roughly 3 trillion won is expected to leave for the United States by the end of September. We have not found a confirming release from the Ministry of Trade, Industry and Energy, and officials have described the project as not finally fixed, so that figure should be read as press reporting rather than as a scheduled payment.
There is also a venue. Korea Premium Week runs from 28 September to 16 October, and its foreign-exchange reform session is the obvious place for someone to ask what programmed dollar outflows of this size do to the won. Whether anyone asks is a reasonable test of how candid the programme is.
A gas plant in Texas is a strange thing for a Korea equity investor to care about. The reason to care is not the plant. It is that the total of which the plant is the first instalment may end up setting a tariff rate on memory, and that the tariff people are already quoting is not that rate and never touched memory in the first place.
Sources
We take facts from these and write our own sentences. Where a claim rests on a government briefing rather than a document we say so in the text. We link to a document only where we hold the exact address for it.
Documents
- Board of Governors of the Federal Reserve System, FOMC statement, 16 September 2026. Source for the quarter-point increase to a target range of 3.75 to 4 per cent, the 12 to 0 vote and the quoted language on inflation.
- White & Case, analysis of the Section 232 proclamation of 14 January 2026. Source for the effective date, the 25 per cent rate, the tariff subheadings and technical thresholds, the intended targets, the seven end-use exceptions and the absence of any country ceiling. We have read this rather than the proclamation text itself and say so.
Reporting and briefings
- Hankyung, on the steering committee resolution of 7 September 2026. Source for the resolution itself, the 6.3 gigawatt and 22 billion dollar figures, the remaining approval chain including possible National Assembly consent, and the carbon capture and spent fuel recycling projects behind it.
- Asia Economy, 8 September 2026. Source for the Encinal location, the 1.4 gigawatt and 4.9 gigawatt phasing, the negotiating range between the Korean and American figures, and the reactor track of up to eight units at about 15 billion dollars each.
- Seoul Economic Daily, 16 January 2026. Source for the point that Korean memory carries no direct burden under the January measure, and for the signal that broader semiconductor tariffs and offset programmes may follow.
- TrendForce, 4 September 2026. Source for Commerce Secretary Lutnick on linking tariff rates to investment levels, the possible extension to products containing semiconductors, the Taiwan duty-free quota of 2.5 times and 1.5 times planned capacity, and the TSMC investment figure.
- The Korea Times, 4 September 2026. Source for Kim Jung-kwan’s remarks, for the November joint fact sheet as the origin of the “no less favorable” language, and for his statement that the first project could be concluded within September.
- Digital Daily, 24 July 2026. Source for the Washington meetings of 23 and 24 July, the Korean position that the combined rate including Section 301 actions should not exceed 15 per cent, the American reconfirmation, and the exclusion of goods already under Section 232 from the forced labour measure.
- Segye Biz, 17 June 2026. Source for the Korea–US Strategic Investment Special Act taking effect and the creation of the state investment corporation.
- Seoul Shinmun, 17 September 2026. Source for the won close of 1,368.6, the 9.2 won move, the fifth consecutive session of depreciation, the KOSPI close of 6,717.97, and for the fact that the Seoul close preceded the FOMC decision.
What does not exist
- No DART disclosure. No listed issuer has disclosed an obligation arising from this project, and no Korean contractor or equipment supplier has been named in a filing.
- No published release from the Ministry of Trade, Industry and Energy confirming the reported first remittance of roughly 3 trillion won. We report the figure as press reporting and mark it as unconfirmed.
- No published broader Section 232 semiconductor measure, no rate for Korea, and no published rule connecting the 15 per cent figure to a Section 232 action.
Corrections
None yet. If you can point to a primary document that contradicts anything above, we will correct it and say what changed.
Disclosure. The author holds no position in any company named in this article as of the date of publication. This article is general information and analysis about trade policy and its effect on listed companies. It is not investment advice, not a recommendation to buy or sell any security, and not a forecast of any price, rate or index level. The section headed Editor’s opinion is comment: it argues a view, and we fence it off from the sourced material for that reason. We have not tailored anything here to your circumstances, and only a qualified adviser in your jurisdiction can do that. We are not registered as an investment adviser in any jurisdiction, and this site has no commercial relationship with any company, exchange or research provider named above. See the Editorial & Sourcing Policy and Disclaimer.