On June 20, according to the Wall Street Journal, the last thing U.S. President Trump wants to see is another impact on consumers’ wallets. But there are few ways for U.S. policymakers to quickly resolve the shortage of memory chips that has caused Apple to raise prices in the short term.


Samsung memory chips

Currently, only a handful of companies in the world produce memory and storage chips, and building new chip factories often takes years. Three major industry giantsSamsung, SK Hynix and MicronDominates the memory chip market. Now, they areA large amount of production capacity is invested in the rapidly growing AI industry, thus squeezing the chip supply available to consumer electronics companies.

U.S. lawmakers have approved tens of billions of dollars in subsidies and tax credits to expand domestic semiconductor manufacturing, including memory chip factories Micron is building in Boise, Idaho, and Clay Township, near Syracuse, New York. The problem is that the first of the new plants in Idaho won't start production until the middle of next year, and the New York plant won't start production until 2030.

“Technological change is advancing rapidly, but it is constrained by the slower development of physical systems such as manufacturing,” said Kathryn Mitchell, technology policy counsel at law firm DLA Piper. She has participated in chip project financing at the U.S. Department of Commerce.

Chip companies are not active in increasing production

As the industry has experienced boom and bust cycles many times in the past, major memory chip manufacturers are very cautious about expanding production capacity and do not want to repeat the situation of oversupply and plummeting prices. Therefore, their investment in new factories remains relatively conservative.

The same situation applies to manufacturers of memory chips known as NAND flash, including the three giants mentioned above as well as Kioxia and SanDisk. Although gross profit margins have soared to record highs, such as Micron's as high as 80%, these companies remain cautious.


Share prices of three major memory chip manufacturers surged

South Korea's SK Hynix is ​​now among the companies with a market value of over US$1 trillion, together with Samsung and Micron. But as recently as 2023, SK Hynix was losing billions of dollars due to the industry downturn and was forced to cut production. Also in 2023, Micron will lay off 15% of its employees.

However, not long after, the AI ​​wave suddenly broke out, suddenly driving the demand for a specific type of memory chip. This chip is very suitable for computers used to train and run popular AI models, that is, high-bandwidth memory (HBM). At the same time, AI data centers also require a large number of more traditional memory chips.

“AI companies have the most financial power in the entire economy, and they are driving all other buyers out of the memory chip market through higher prices,” said Jim Secreto, a consultant at the U.S. Commerce Department during the Biden administration. “The rest of us are left to foot the bill.”

Trump and U.S. Commerce Secretary Lutnick have been pushing chip companies to increase investment in the United States to obtain subsidies provided by the "Chip and Science Act of 2022", and have threatened to impose tariffs on semiconductor manufacturers that have insufficient investment in the United States.

In theory, the Trump administration could also require memory chip makers to allocate a certain percentage of their capacity exclusively to consumer electronics. However, industry executives and analysts point out that this approach is difficult to implement and is likely to lead to new supply shortages in other market areas.

Difficulty working with Chinese suppliers

China's top DRAM maker Changxin Memory and NAND flash memory maker Yangtze Memory are growing rapidly and hope to expand their global customer base. China is the closest to a quick solution to the chip shortage, but such a solution would be partial at best.

According to people familiar with the matter, Yangtze Memory is building three new factories in China, which will more than double its production capacity by the end of 2027. Meanwhile, Changxin Storage is seeking an initial public offering in Shanghai to raise $4 billion and is building a new factory. The company said that revenue in the first quarter of 2026 increased by more than 700% year-on-year, but also admitted that its products still lag behind the three major industry leaders.


Apple prepares to raise prices

However, U.S. national security regulations make it difficult for U.S. companies to cooperate with Chinese memory chip manufacturers. The purpose is not only to protect U.S. core technology secrets, but also to maintain the market position of Micron and South Korean and Japanese suppliers to a certain extent. South Korea and Japan are allies of the United States.

According to people familiar with the matter, Micron, as an Apple supplier, has been lobbying for stricter restrictions on cooperation between U.S. companies and Chinese companies considered to pose security risks. In the U.S. Congress, lawmakers have introduced bipartisan legislation to support this position. Micron recently launched a new production line in a factory expansion project in Manassas, Virginia, and has committed to investing approximately $200 billion nationwide in the United States.

However, the shortage of memory chips has become so severe that some large consumer technology companies have begun asking the U.S. government to relax restrictions on cooperation with Chinese companies. These companies also hope that the United States will relax approval for Samsung and SK Hynix to increase production in China.

Apple CEO Tim Cook said in an interview with the Wall Street Journal: "In terms of policy options, all options should be on the table for discussion."

In 2022, Apple cooperated with Yangtze Memory and prepared to make the latter one of its flash memory suppliers, but was forced to abandon the plan due to opposition from U.S. lawmakers.

Some of the world's largest personal computer makers, including Hewlett-Packard, are in discussions with supply chain partners to use Changxin Memory's memory chips in products sold to Asia, people familiar with the matter said.