The lack of memory has become a political issue in Washington. Now the chip industry has a message for the Trump administration: leave the market alone or the squeeze will only get worse.
The warning came in a letter to top US officials from semiconductor industry group SEMI. Any attempt to fix the shortfall by managing prices or output would deepen it, the group said. Bloomberg reports.
Traces of the grunt return The AI boomconsume memory chips faster than manufacturers can produce them.
Hands from the market
SEMI’s argument is clear. “Interventions that distort pricing or capacity decisions risk prolonging the decline in demand,” the group said in a copy seen by Bloomberg. He wants the opposite approach. Allow companies to sign long-term supply contracts with customers and extend tax incentives that boost U.S. production.
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The stakes are high for its members. The three major memory manufacturers are all owned by SEMI: Idaho-based Micron, plus South Korea’s SK Hynix and Samsung. As demand for AI outstrips supply, their stock has soared.
The pocketbook problem
The policy is changing because the shortage is now reaching ordinary buyers. Memory is sitting in everything from cars to laptops, and prices are skyrocketing. Even decades old memory standards they jumped. apple and Microsoft both have raised the price of popular gadgets, which worries politicians who are watching voters’ wallets.
SEMI also has a fix for this. Instead of capping prices, it wants Congress to soften the blow with sales tax breaks for phones and laptops. The group was careful to thank the administration for its support to the chip sector.
The Chinese question
The letter falls in the middle of a stronger battle. Apple does lobbying the same officials For permission to buy memory from two Chinese firms blacklisted by the Pentagon. SEMI’s letter does not include any Chinese suppliers. But that goes to the people Apple is pushing: the Secretaries of Treasury, Defense, Commerce, and State.
Not everyone in Washington wants a light touch. One Republican senator, Bernie Moreno of Ohio, urged the commerce secretary to put American shoppers first. He warned that the auto industry would be hit, as seen during the pandemic.
Months, not years
The hard truth is time. SEMI says that storage capacity should grow by about 19 percent per year, but demand for artificial intelligence will still catch up. Building new factories takes years. Until they arrive, the discrepancy continues to push prices up. For European buyers, the warning already matches the one made in Britain.
Currys expects phones, laptops and TVs to be more expensive later this year. The industry’s message to politicians is simple. You cannot adjust the availability of more chips.
