The global semiconductor industry has advised the Trump administration that to tackle the surge in memory prices, it needs to focus on expanding tax benefits rather than implementing market-disturbing measures, Bloomberg reported on July 2.
According to the report, the Semiconductor Equipment and Materials International (SEMI) urged senior officials in a letter dated July 1 to continue allowing long-term contracts between memory companies and their customers, and to enhance tax incentives to boost domestic production in the U.S.
SEMI stated in the letter, "Targeted policies that support the acceleration of domestic supply resilience can be effective, but interventions that distort price or production capacity decisions risk prolonging demand stagnation." It added, "The current market situation is being resolved as interest in manufacturing investment and long-term purchase contracts in the U.S. increases." SEMI represents over 3,000 global semiconductor companies, including major memory firms like Samsung Electronics, SK Hynix, and Micron, as well as Intel and TSMC.
This letter comes amid a significant rise in memory semiconductor prices due to a recent boom in artificial intelligence (AI), exacerbating what is referred to as 'chipflation'—the inflation caused by rising semiconductor prices. Recently, major U.S. tech companies like Apple and Microsoft have raised product prices in response to the increase in memory semiconductor costs, prompting U.S. policymakers to monitor the impact on consumers.
In fact, there are growing calls within U.S. politics for action regarding memory semiconductor companies. Senator Bernie Moreno (R-Ohio) sent a letter to U.S. Secretary of Commerce Gina Raimondo in April, warning that a shortage of memory semiconductors could lead to disruptions in the automotive supply chain and price increases similar to those seen during the COVID-19 pandemic. He urged prioritizing domestic supply of memory semiconductors. Additionally, reports indicate that Apple requested the Trump administration to allow the use of Chinese memory semiconductors as a response to rising prices.
However, SEMI believes that rather than such measures, allowing memory semiconductor companies to continue long-term contracts with customers and providing tax credits would alleviate price pressure. Royal Kasten, SEMI's Vice President of Global Public Policy and Advocacy, stated, "SEMI and our members appreciate the Trump administration's efforts to proactively strengthen memory production capacity to support the pursuit of U.S. technological leadership in AI and data center infrastructure."
Meanwhile, SEMI forecasts that memory semiconductor production capacity will increase by 19% annually, but explosive demand driven by AI infrastructure development is expected to outpace supply.
* This article has been translated by AI.
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