Semiconductor Industry Urges U.S. Government Not to Directly Intervene in Memory Market, Calls for Production Expansion

SEMI Sends Letter to Senior U.S. Officials

Supply Shortages and Price Pressures Expected to Persist

"Focus Should Be on Expanding Production Capacity and Long-Term Contracts"

As memory semiconductor shortages intensify in the smartphone, automotive, and defense industries, the semiconductor industry has urged the U.S. government to refrain from intervening in the market and instead focus on expanding production.

Chip of Micron Technology, an American memory semiconductor company. Photo by Reuters Yonhap News

The global industry association SEMI (Semiconductor Equipment and Materials International) stated in a letter sent on July 1 (local time) to senior officials of the Donald Trump administration, "Policies to enhance the resilience of domestic supply chains can be helpful, but interventions that distort prices or production capacity risk prolonging the shortage." The letter added, "Currently, the market is responding through increased investment in U.S. production and long-term supply contracts."

SEMI includes more than 3,000 member companies, such as major memory manufacturers Micron Technology, SK hynix, and Samsung Electronics, as well as semiconductor manufacturers, equipment, and materials companies.

SEMI diagnosed that as production of high-bandwidth memory (HBM) for AI data centers expands, general DRAM production capacity is decreasing, which is exacerbating memory supply shortages across a range of industries, including laptops, smartphones, automobiles, home appliances, and defense.

Quoting industry analysis, SEMI projected that memory production capacity will increase by about 19% per year on average, but the pace of AI infrastructure demand growth is expected to outstrip this. While major companies are expanding their production facilities, SEMI predicted that, since it takes years to build new factories, supply shortages and upward pressure on prices will likely persist for the time being.

Accordingly, SEMI proposed that, rather than intervening in the market, the government should help companies maintain long-term supply contracts and extend tax incentives for expanding U.S. production. Strengthening core materials supply chains, relaxing regulations, and introducing consumer tax credits to mitigate rising electronics prices were also suggested as policy alternatives.

According to Bloomberg News, this letter was delivered as Apple requested the Trump administration to allow the use of memory components from Chinese semiconductor companies that are on the U.S. Department of Defense blacklist. It is reported that Apple hopes to source DRAM and NAND flash used in devices for sale in China from Changxin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC).

The media also reported that some in U.S. political circles are calling for the government to intervene to ensure that memory manufacturers prioritize supplying semiconductors to American customers. In April, Republican Senator Bernie Moreno suggested in a letter to Secretary Rutnik that "the memory shortage could lead to automobile supply shortages like those seen during COVID-19," and proposed such measures.

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