Semiconductor industry group SEMI sent a letter on July 1 to Treasury Secretary Bessent, Defense Secretary Hegseth, Commerce Secretary Lutnick, and Secretary of State Rubio. According to a copy of the letter obtained by Bloomberg, SEMI warned that if the government attempts to address the global supply crunch by influencing memory chip pricing or capacity decisions, it may instead prolong the demand crunch driven by the AI boom.
SEMI's July 1 Letter to Four Cabinet Secretaries Spanning Finance, Defense, and Foreign Affairs
According to a copy of the letter obtained by Bloomberg, the letter is dated July 1, 2026, and is addressed to Treasury Secretary Bessent, Defense Secretary Hegseth, Commerce Secretary Lutnick, and Secretary of State Rubio.
In the letter, SEMI stated that current market conditions are being addressed through investment in U.S. manufacturing and an increasing number of long-term procurement agreements, suggesting that market mechanisms themselves are already self-correcting. Royal Kastens, SEMI's Vice President of Global Public Policy and Advocacy, said SEMI supports government efforts to help strengthen memory capacity but opposes direct government intervention in market pricing or supply decisions.
HBM to Account for About 23% of DRAM Capacity in 2026; 32GB DDR5 Prices Estimated to Nearly Quintuple
According to TrendForce estimates, high-bandwidth memory (HBM) will consume about 23% of global DRAM wafer capacity in 2026, up from 19% in 2025. Samsung, SK Hynix, and Micron, which together control over 95% of global DRAM capacity, are prioritizing limited capital expenditure toward higher-margin HBM, creating a crowding-out effect that competes with consumer-grade memory for capacity.
Market estimates indicate that the price of standard 32GB DDR5 memory modules has risen from about $95 in mid-2025 to an expected $550 to $600 in the second quarter of 2026, a nearly fivefold increase. Omdia predicts supply will not see significant relief until 2027.
Apple Lobbies Bessent for Permission to Buy Memory from Chinese Manufacturers on DoD Blacklist; Cook Personally Lobbying
According to reports, Apple is currently seeking approval from the Trump administration to allow it to purchase memory components from two Chinese companies listed on the U.S. Department of Defense blacklist. It is reported that Apple's outgoing CEO Tim Cook has been lobbying Treasury Secretary Bessent on this proposal recently. Although SEMI's letter does not name Chinese suppliers, it directly opposes Apple's lobbying direction.
Republican Senator Writes to Lutnick, Urging Priority for Memory Component Supply to U.S. Domestic Demand
According to reports, Republican Senator Moreno wrote to Commerce Secretary Lutnick in April 2026, warning that memory chip shortages could cause the automotive industry to repeat the supply disruptions and price surges seen during the COVID-19 pandemic, and urged Lutnick to prioritize ensuring memory component supply meets U.S. domestic demand. This move indicates that at least one member of Congress has explicitly supported market intervention to force memory manufacturers to prioritize supply to U.S. customers, a direction SEMI strongly opposes in its letter.
SEMI Recommends Tax Credit Policies to Mitigate Consumer Price Impact, Rather Than Intervening in Pricing or Supply Decisions
According to SEMI's letter and official statements, SEMI urges the government and Congress to work together to develop consumer-oriented tax deductions or credits to mitigate the impact of rising prices for smartphones and laptops on consumers. SEMI explicitly opposes direct government intervention in memory manufacturers' pricing or supply decisions. SEMI also recommends allowing companies to continue signing long-term procurement agreements and extending tax incentives aimed at boosting U.S. domestic capacity.
Frequently Asked Questions
What is SEMI's core stance in its letter to the U.S. government?
According to a copy of the letter obtained by Bloomberg, SEMI warns that if the government intervenes in memory chip pricing or capacity decisions, it could worsen the historic supply crunch driven by AI demand. SEMI argues that the government should replace market intervention with tax credits, allow companies to continue signing long-term procurement agreements, and extend tax incentives for boosting U.S. domestic capacity.
How large is the estimated price increase for 32GB DDR5 memory?
According to reports, the price of standard 32GB DDR5 memory modules has risen from about $95 in mid-2025 to an expected $550 to $600 in the second quarter of 2026, a nearly fivefold increase. Omdia predicts supply will not see significant relief until 2027.
How does Apple's lobbying direction differ from SEMI's stance?
According to reports, Apple is lobbying the Trump administration to allow it to purchase memory from Chinese companies on the U.S. Department of Defense blacklist, aiming to increase supply sources to lower procurement costs. SEMI opposes any form of government market intervention and advocates replacing supply controls with tax credits. The two approaches are opposite.
