By Amrith Ramkumar, Rolfe Winkler and Raffaele Huang
The last thing President Trump wants is another hit to consumers' pocketbooks. But there is little policymakers can do to quickly address the memory-chip shortage behind Apple's decision to raise prices.
Only a handful of companies make memory and storage chips, and it takes years to build new factories. Three industry titans -- Samsung Electronics, SK Hynix and Micron Technology -- dominate the business of memory chips, also called DRAM. They are using much of their capacity to serve the fast-growing artificial-intelligence industry, squeezing consumer-technology companies.
U.S. lawmakers have approved tens of billions of dollars in grants and tax credits to expand semiconductor manufacturing in the U.S., including memory-chip factories being built by Micron in Boise, Idaho, and Clay, N.Y., near Syracuse. The problem is, the first of the new Idaho facilities won't open until the middle of next year, and the New York plant won't start production until 2030.
"You have this fast-moving technological shift, but you're constrained by slower moving physical systems like manufacturing," said Kathryn Mitchell, a tech-policy adviser at law firm DLA Piper who previously helped fund chip projects at the Commerce Department.
Burned by past boom-bust cycles, the big memory-chip producers are cautious about creating another glut, which is why their spending on new plants remains relatively conservative.
That is also true for the makers of storage chips known as NAND, which include the three titans plus Kioxia and Sandisk. The caution comes despite gross profit margins that have soared to records: in Micron's case, 80%.
As recently as 2023, South Korea's SK Hynix -- now valued at more than $1 trillion alongside Samsung and Micron -- was losing billions of dollars and cutting production during an industry downturn. Micron cut 15% of its staff that year.
Not long after, AI took off, stoking demand for a particular memory chip well-suited for use in computers that train and query popular artificial-intelligence models. AI data centers also need large quantities of more traditional memory chips.
"The AI companies have the deepest pockets in the economy and they're outbidding everyone else for memory," said Jim Secreto, a consultant who worked in the Commerce Department during the Biden administration. "The rest of us just have to pay for it."
Trump and Commerce Secretary Howard Lutnick have focused on getting chip companies to increase their domestic investments to access subsidies from the 2022 Chips and Science Act and have threatened tariffs on semiconductor producers that don't invest enough in the U.S.
Trump could direct the memory-chip makers to allocate a certain percentage of their output to consumer-technology products. Such an arrangement, however, would be difficult to enforce and could lead to shortages in other market segments, industry executives and analysts said.
The China card
Two Chinese chip makers -- CXMT, the country's top DRAM producer, and Yangtze Memory Technologies, which focuses on NAND storage -- are growing fast and want to expand their global clientele. China is the closest thing to a quick fix for the chip shortage, but the solution is at best partial.
Yangtze Memory is building three new factories in China that would more than double its current capacity by the end of 2027, people familiar with the plans said. Meanwhile CXMT is seeking to raise $4 billion in an initial public offering in Shanghai, and it is building new factories. It said its revenue rose by more than 700% year-over-year in the first quarter of 2026, though it acknowledged that its products still trail those of the three industry leaders.
U.S. national-security rules make it hard for American companies to work with Chinese memory-chip makers. The goal is to protect U.S. technology secrets as well as the market position of Micron and suppliers based in South Korea and Japan, both U.S. allies.
Micron, an Apple supplier, has been lobbying for even stronger restrictions on U.S. partnerships with Chinese firms deemed security risks, people familiar with the talks said. In Congress, lawmakers have introduced bipartisan legislation backing that position. Micron recently started production on a new supply line as part of an expansion at a Manassas, Va., plant and has pledged to invest some $200 billion across the country.
Kevin Wolf, a lawyer at Akin Gump who worked on export controls in the Obama administration, said the question for policymakers was: "What is the greater threat, the shortage or propping up China making advanced memory?" Wolf said that in his view, propping up China would be bad for national security.
Yet the memory-chip shortage has gotten bad enough that some big consumer-tech companies have asked administration officials to loosen the restrictions on working with China. The companies also want the U.S. to make it easier for Samsung and SK Hynix to boost production in China.
Apple Chief Executive Tim Cook said in a Wall Street Journal interview that "everything needs to be on the table" regarding policy choices.
In 2022, Apple worked with Yangtze Memory to prepare the Chinese NAND maker to become one of its suppliers of flash storage but was forced to abandon that plan when lawmakers opposed it.
Some of the world's biggest personal-computer makers, including HP, are in talks with supply-chain partners about using CXMT memory chips in products bound for Asia, people familiar with the discussions said.
(END) Dow Jones Newswires
June 19, 2026 19:00 ET (23:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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