In a world where high commodity prices are the cure for high commodity prices, it was only a matter of time before we saw a surge in oil output in response to near-record oil prices, as Diamondback did ovenright. The same logic applies to memory chips, another commodity, whose prices have exploded in recent months due to soaring demand by data centers.
And while markets expect prices to drop once more supply comes on line, the proposed timline - which spans well into 2027 - is unacceptable, meanwhile the raging memory prices are translating into higher prices for virtually all electronics at a time when inflation is already set to explode higher.
Which is why the US is working to address the global memory chip shortage through a supply chain coalition with allies in Asia, Europe and the Middle East, Nikkei Asia reported citing a US official.
The State Department unveiled the Pax Silica initiative in December, a coalition with allies to secure supply chains involving semiconductors, artificial intelligence and critical minerals while reducing dependence on China.
Fourteen countries including India, Japan, South Korea, Singapore and the Philippines have joined the coalition, with Norway set to do so this week, Jacob Helberg, undersecretary of state for economic affairs, told Nikkei Asia on the sidelines of the 2026 Milken Institute Global Conference.
The global memory chip supply shortage continues to worsen as the industry struggles to keep pace with skyrocketing demand boosted by artificial intelligence, weighing on tech companies big and small from AI chipmakers to Apple.
The Trump administration is looking to address the memory chip crunch by leveraging the supply chain coalition, particularly with Asian allies such as South Korea.
"Addressing the memory shortage is, for us, a key priority to advance through the Pax Silica initiative," Helberg said. "It's possible for us to partner in a bilateral and plurilateral way with an excellent framework to actually spin up projects that help us move the needle."
One example of that partnership, Helberg said, is the 4,000-acre industrial hub being set up on the Philippine island of Luzon by Washington and Manila. Helberg will lead a delegation of U.S. officials and business leaders to the Philippines later this month to discuss details of the use of the massive industrial park.
It remains to be decided how much of the land will be used for chip manufacturing, mineral refining or some other key manufacturing, he said.
"What we do know is we want memory to be in the mix in our strategy, and so if we don't end up partnering with the Philippines for memory, we'll easily partner with someone else for the memory piece," Helberg said, adding that the U.S. "would very much like to partner with companies like Samsung and SK Hynix" on addressing the memory chip crunch. It isn't clear how such a partnership would change the status quo since both companies are booked solid well into the future.
Meanwhile, President Trump is expected to visit Beijing on May 14-15, and supply chain issues including semiconductor and rare-earth export controls could be discussed when he meets Chinese President Xi Jinping.
"President Trump will be heading to Beijing with the American delegation with maximum optionality and leverage because he has really positioned the United States to enhance its position at many different layers of the supply chain," Helberg said.
Regardless of the outcome of the meeting, initiatives such as Pax Silica that support supply chain de-risking from China will continue, Helberg said.
"The president can actually have a very productive and fruitful trip to China, while at the same time continuing to make progress on all of our supply chain security initiatives," he said.