ITIF urges cautious policy response to AI memory chip shortage

ITIF has published an analysis arguing that the U.S. should respond cautiously to the AI-driven memory chip shortage and prioritize expanding domestic semiconductor supply rather than micromanaging allocation.

• The article says the shortage is being driven by AI-related data center demand, with DRAM and NAND supply constrained as major producers Micron, Samsung, and SK Hynix prioritize HBM.
• It recommends avoiding semiconductor tariffs, keeping export controls narrowly targeted, considering limited temporary licenses for YMTC and CXMT only for China-market sales, and expanding U.S. capacity through the 35% Advanced Manufacturing Investment Credit, the $275 million CHIPS award for Micron’s Manassas, Virginia facility, and supply agreements such as Micron’s deal with General Motors.