SEMI Lobbies Trump Administration Against Memory Market Intervention, Proposes Consumer Electronics Tax Credits

SEMI Opposes Government Intervention in Memory Market, Recommends Tax Incentives to Ease Shortage

SEMI, the semiconductor industry association whose members include leading memory chipmakers Micron, Samsung, and SK hynix, has written to the Trump administration urging the White House not to pursue any policy measures that would interfere with the memory market — whether affecting pricing or production capacity — and warning that such intervention would only deepen the existing supply shortage.

According to Bloomberg, the letter was prompted by Ohio Republican Senator Bernie Moreno's April letter to Commerce Secretary Howard Lutnick, in which Moreno called on the government to take steps to "ensure the American automotive industry has adequate access to memory chips," citing the significant disruption the current situation is expected to cause to the auto sector.

SEMI: Market Intervention Would Prolong Demand Weakness

In its letter to the administration, SEMI stated: "While targeted policies can accelerate domestic supply resilience, interventions that distort pricing or capacity decisions risk prolonging demand weakness. Current market conditions are being addressed through investments in U.S. manufacturing and a growing number of long-term supply agreements."

Meanwhile, Apple has separately been lobbying the government to allow it to source memory chips from Chinese manufacturer CXMT — a company on the U.S. Entity List — as a means of addressing the shortage. SEMI has proposed a different interim solution: rather than opening the door to new market entrants, it is urging the executive branch to work with Congress on tax deductions or credits for consumer electronics products to help offset the price increases driven by the chip shortage.

Capacity Expansion Too Slow; Shortage May Extend to 2027 and Beyond

SEMI noted that while memory manufacturing capacity is projected to grow at roughly 19% annually, new wafer fabs take several years from groundbreaking to full production — meaning near-term supply cannot keep pace with demand. Driven by surging demand from AI hyperscale data centers, the memory chip shortage is expected to continue worsening. Both Samsung and SK hynix have indicated the shortage could persist through 2027 or even longer.

Consumers Shift to DDR4 as PC Shipments Drop 7% in Q1

In response to elevated memory prices, consumers are increasingly turning to older, slower but more affordable DDR4 memory, with demand rising notably and some vendors even restarting DDR4 motherboard and memory kit production lines. However, DDR4 products remain relatively expensive, leading most consumers to delay planned upgrades. PC purchases fell 7% in Q1 2026, and industry analysts estimate full-year shipments could decline by as much as 14% — which would represent the largest market contraction in three years.

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