A powerful coalition of nine US trade associations has issued an urgent warning to the White House, cautioning that federal intervention in the memory chip market risks turning a severe shortage into a catastrophic economic failure.
The June 3 letter to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick argues that AI data centers are consuming roughly 70% of the global memory chip supply, leaving critical infrastructure sectors starved of essential components.
Micron Technology CEO Sanjay Mehrotra stated the supply shortage will extend well beyond 2026, driven by unrelenting AI demand and shifting manufacturing policies. While chipmakers benefit from elevated prices, the trade groups argue this is a market failure for non-AI sectors.
The cascading consequences are severe. Telecom infrastructure deployments are stalling, automotive production faces a new wave of delays, and medical device manufacturers are confronting life-threatening availability problems.
This pressure coincides with 100% tariffs on certain foreign chip imports. The coalition urged the administration to prioritize a general expansion of production capacity rather than making foreign chips prohibitively expensive, warning that new fabrication plants take three to five years to reach full output.
The crisis echoes pandemic-era shortages that cost the auto industry tens of billions. With the memory supply dedicated primarily to AI workloads, the alliance is pushing for a more balanced allocation of resources before consumer electronics prices surge and essential services pay the price.