US Readies Memory-Chip Tariffs With Almost No Domestic Capacity

The latest:

The Trump administration is readying tariffs on imported memory chips to spur domestic investment, even though the US has almost no capacity to make them, the Wall Street Journal reported. Commerce Secretary Howard Lutnick has suggested foreign companies investing in US production could win a reprieve from the levies. Executives at Samsung Electronics, SK Hynix and Micron Technology have said the shortage could last from 12 months to several years.

Details:

• The prices: Flash storage is expected to have quadrupled in price by the end of the year compared with mid-2025, while server memory is on course for a more than sixfold increase, according to TrendForce. The AI buildout requires vast data-center storage plus advanced memory to train models.
• The capacity gap: The US currently has one commercial memory production facility, operated by Micron in Virginia, the Journal reported. It produces older-generation products for automotive, aerospace, defense and industrial customers, not the high-bandwidth memory used to train frontier AI systems.
• The tariff track: A Commerce Department national-security probe into certain imported chips led to tariffs in January, with exemptions for chips used in consumer electronics and data centers. Washington is now preparing to widen the scope. The Commerce Department did not respond to requests for comment.
• Micron’s timeline: Micron has pledged roughly $250 billion through 2035 for US chip-making plants and technology investments. One of two new Idaho factories starts ramping production from the middle of next year; its New York mega site will not begin until 2030.
• The packaging problem: Micron still ships what it produces in the US to Asia for final-step packaging into high-bandwidth memory, the chips needed for AI training and inference. It plans to bring HBM packaging home only after completing its second Idaho plant in late 2028.
• SK Hynix plant: The first US HBM packaging facility, owned by SK Hynix, recently broke ground and is expected to open in 2028, with mass production the following year. The company plans to ship the memory needed for its HBM from South Korea. Whether it or Micron wins tariff relief is unsettled.
• Samsung’s plans: Samsung Electronics has readied tens of billions of dollars for new chip plants in Texas, though not for memory chips. New fabs can cost $20 billion or more and take years to build.
• The security case: Heavy reliance on foreign-produced memory exposes the US to supply disruptions threatening businesses, national defense and leadership in a technology critical to AI, said Hanna Dohmen, a senior research analyst at Georgetown’s Center for Security and Emerging Technology.
• The pushback: Tariffs would drive up semiconductor costs while increasing tensions with the partners Washington needs to secure its AI lead, said Troy Stangarone of the Korea Economic Institute of America. “Tariffs on semiconductors would be self-defeating,” he said.
• Consumer impact: Higher memory costs have already lifted electronics prices. Apple raised prices on Mac computers and iPads, citing surging memory costs, and the iPhone 18 Pro and Pro Max each cost $100 more than last year’s models.

Background:

Efforts to expand US memory production began under the Biden administration, but the projects take years to complete and will not ease the global supply crunch soon.

Between the lines:

The timelines are the story. Every domestic fix named — Micron’s Idaho ramp, its 2030 New York site, SK Hynix’s 2028 packaging plant — lands after the shortage window executives describe, while tariffs would raise costs immediately. Lauryn Williams of CSIS said onshoring fits the administration’s goal of beating China in AI; the gap between that goal and the build schedules is where the cost falls on buyers.

What’s next

Watch the Commerce Department’s decision on widening the tariff scope and whether Micron and SK Hynix secure exemptions, Micron’s Idaho production ramp starting mid-next year, and further electronics price increases tied to memory costs.