SEMI group opposes government intervention in memory chip market

SEMI's Position on Government Intervention

The SEMI industry association, which consists of major memory chip manufacturers including Micron, Samsung, and SK hynix, has communicated its stance to the Trump administration against any intervention in the memory market. They argue that such actions could lead to worsened shortages and mismanagement of pricing and production capacity.

Background and Context

The letter follows concerns raised by Sen. Bernie Moreno about the memory chip supply impacting the U.S. auto industry. In response to this, SEMI emphasized that any government policies should not distort market dynamics, recommending that instead of intervening directly, the administration should consider incentives to buyers through tax measures.

Proposed Alternatives to Address the Crisis

SEMI suggests that the government work with Congress to introduce tax deductions or credits on consumer electronics to mitigate the impact of rising chip prices rather than allowing new market entries like Chinese firm CXMT. This alternative focuses on supporting consumers purchasing electronics amid the chip shortage.

Market Dynamics and Future Projections

Despite a projected annual increase in memory manufacturing capacity of about 19%, it is anticipated that demand will outstrip supply, primarily driven by the needs of AI hyperscalers. Both Samsung and SK hynix predict that shortages could persist until 2027 or longer, leading consumers to seek alternatives like the more affordable DDR4 memory.

Consumer Behavior Patterns

In response to the ongoing shortages, consumers are delaying computer upgrades, which is reflected in a 7% decline in PC purchases during the first quarter of 2026. This trend highlights the impact of memory prices on consumer decisions and the necessity for effective market solutions.