U.S. policymakers are focused on supply chain resilience and de-risking from geopolitical adversaries. This strategic imperative means they will favor creating trusted capacity over actions that might lower memory chip prices quickly, such as loosening export controls on advanced technology.
Policymakers are not treating all memory chips equally. A bifurcated strategy is emerging: strict controls and allied partnerships for high-end AI chips (HBM), versus more flexible options like differentiated licensing for lower-end commodity memory used in consumer goods and autos.
China's growing capacity in conventional memory may help buyers in consumer electronics and automotive sectors crowded out by AI demand. However, due to technology gaps and U.S. restrictions on advanced tools, China cannot address the critical shortage of high-bandwidth memory needed for advanced AI.