Micron, one of the world's largest memory manufacturers, broke ground on a new $100 billion manufacturing plant on January 16 in Syracuse, New York. Attending the ceremony as an honorary shovel-holder was US Commerce Secretary Howard Lutnick.
It was all smiles during the proceedings, but shortly after, Lutnick delivered a direct warning to memory manufacturers that are not operating on US soil. As quoted by Bloomberg:
Everyone who wants to build memory has two choices: They can pay a 100% tariff, or they can build in America. That’s industrial policy.
US Commerce Secretary Howard Lutnick
Lutnick did not specifically name any memory manufacturers in his warning, but it's hard to ignore the fact that with Micron's business handled on US soil, it really only leaves two other companies.
Indeed, the memory that Lutnick is talking about is produced by a sector dominated by Micron, Samsung, and SK Hynix. While Micron is headquartered in the US, the other two are South Korean entities. These three companies supply the vast majority of the world's DRAM, which is used to produce both specialized and consumer memory.
Restricting the market further, Micron, Samsung, and SK Hynix are the only memory manufacturers with the capability to produce High-Bandwidth Memory (HBM). HBM chips are used in specialized AI GPUs produced by the likes of NVIDIA and AMD, and they're so in demand that Micron announced late last year that it was completely exiting the consumer RAM market to focus on serving AI firms.
The thirst for HBM chips is certainly a catalyst for the ongoing global memory shortages that are threatening to drive up prices of all consumer tech. The big memory manufacturers are happy to sign supply contracts years in advance, especially when the deep pockets of AI firms show up with requests.
Unfortunately, with so much of a focus on HBM from the three largest manufacturers, there's not much memory left for the rest of us. Memory prices are obscene, and they're not expected to get any better any time soon.
Didn't Samsung and SK Hynix already invest in US chip factories?
Lutnick's comment following the Micron groundbreaking ceremony sounds a lot like another given one day earlier, when a trade agreement was reached between Taiwan and the US.
Shortly after the Taiwan deal — which will see at least another $250 billion invested by TSMC to build chipmaking plants in the US — was announced, Lutnick stated to CNBC that "tariffs are likely to be 100%" for any companies that are not building chips in America.
I can't say how all this will play out, but the fact that tariff threats are once again being hammered home by the US Commerce Secretary could leave Samsung and SKHynix scrambling to lock in new investments.
It's important to note that Samsung and SK Hynix do indeed have ongoing investment plans in the US. In 2024, Samsung announced a $40 billion deal that includes a packaging plant for HBM chips based in Texas. Also announced last year, SK Hynix unveiled plans to build a $4 billion plant in Indiana with a focus on HBM modules.
The rub here is that neither of these Samsung and SK Hynix factories actually manufactures the chips, instead focusing on packaging. The chips are created overseas, shipped to the US, and put together to create functional products.
(via PC Gamer)
What do you think about the push to move memory manufacturing onto US soil via tariff threats? Let me know in the comments section!
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