U.S. government threatens DRAM tariff at the worst time ever
An offhand threat by the U.S. Commerce secretary could mean significant additional costs to upgrade or build PCs…or perhaps nothing at all.
As Micron broke ground on a new memory fab in New York, Bloomberg noted U.S. Commerce Secretary Howard Lutnick’s backhanded threat to tariff foreign DRAM makers.
“Everyone who wants to build memory has two choices: They can pay a 100 percent tariff, or they can build in America. That’s industrial policy,” Lutnick said, as recorded by Bloomberg.
Naturally, the comments come at a disastrous time for anyone in the market for DRAM. According to PCPartPicker, the price of DDR4 DRAM is up nearly four times since last June, which is about the same price increase for a pair of DDR5-4800 16GB sticks. Placing a 100 percent tariff on any and all memory chips would essentially double those prices, so the $400 or so you’d currently pay for the DDR5 memory would double to above $800. And, since DRAM is used in everything from cars to smartphones, prices on those products would increase, too.
The computing industry is already facing mammoth price hikes as the supplies of DRAM, SSDs, and even rotating hard drives climb in response to huge demand from AI hyperscalers, who are grabbing all they can of those components for their AI servers. Meanwhile, the Trump administration has raised and lowered tariffs seemingly arbitrarily, with Trump recently quoted threatening to levy tariffs on French champagne if the French don’t join Trump’s proposed Board of Peace.
The stated goal of the tariffs, however, has been to encourage domestic chip manufacturing. Foundry giant TSMC has acceded, speeding ahead on fab plans in Arizona. Meanwhile, Micron is breaking ground on its $100 billion megafab, the site of Lutnick’s remarks, while also buying up a foundry from Powerchip Semiconductor Manufacturing Corporation for $9.5 billion. That fab is based in Taiwan, however.
The U.S. actually lowered tariffs on Taiwan imports last week in exchange for more Taiwan chip investment in manufacturing semiconductors inside the United States.
This week, Lutnick is in Davos, Switzerland, where U.S. government officials are meeting to discuss Trump’s proposal to annex Greenland, a global geopolitical crisis that for now overshadows Trump’s tariff efforts.