A coalition of nine trade associations sent a letter to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick on June 3, 2026, warning that a memory chip shortage due to AI data center expansion threatens to raise costs for consumer electronics, disrupt supply chains and squeeze retail margins.
Signatories include the Retail Industry Leaders Association, the National Retail Federation, NCTA, the Alliance for Automotive Innovation and five other industry groups.
“We write to express our concern about an urgent imbalance in the market for memory chips that could lead to significant and sustained near-term price increases for American households and disrupt critical U.S. supply chains,” reads the letter. See full text of the letter below.
AI data center facilities are consuming an outsized share of memory chip capacity, according to the letter, leaving manufacturers and consumer-facing industries competing for constrained supply and driving an unprecedented surge in chip prices.
“While recent developments in AI offer the promise of generational technological advances and are important for U.S. tech leadership, we must also ensure other key industries are not negatively impacted,” reads the letter.
What It Means for Retailers
Memory chips are embedded in laptops, tablets, smartphones, smart home devices and connected appliances. Cost increases at the chip level flow down to manufacturers and eventually to merchants, who then face a hard choice: absorb the hit or pass it to consumers.
Beyond costs, chip shortages can reduce inventory availability, disrupt sourcing and inflate the cost of the IT infrastructure retailers rely on for point-of-sale, inventory management and ecommerce fulfillment.
The coalition urged the administration to take action on several fronts, including:
- support faster domestic chipmaking capacity.
- ensure memory supply adequately serves consumer industries alongside data centers.
- track market conditions closely.
“Our organizations stand ready to work with you to discuss solutions that may mitigate this quickly developing situation in the short, medium, and long term,” the letter concludes.
Read the Full Text of the Letter
Dear Secretary Bessent and Secretary Lutnick:
The undersigned associations represent companies that employ millions of Americans, supply products that underpin the functioning of our economy, and are key contributors to the expansion of U.S. investment and manufacturing that the Trump Administration has made a centerpiece of its policy agenda.
We write to express our concern about an urgent imbalance in the market for memory chips that could lead to significant and sustained near-term price increases for American households and disrupt critical U.S. supply chains.
Expanding artificial intelligence (AI) data centers consume an enormous share of available memory chip capacity. The result has been an unprecedented surge in the price of memory chips and reduced supply of these chips for manufacturing and consumer-facing industries. While recent developments in AI offer the promise of generational technological advances and are important for U.S. tech leadership, we must also ensure other key industries are not negatively impacted by this disruption in the marketplace.
The real-world impacts of these trends have already begun to show themselves and threaten to deteriorate rapidly if the situation is not remedied. These include price increases for a broad range of everyday consumer electronics and information technology products; significantly higher costs for building, maintaining, and upgrading our nation’s Internet and telecommunications infrastructure; risks to the production and availability of automobiles, medical devices, and other manufactured goods; and delay and disruption in the ability of federal contractors — especially small businesses — to deliver on procurement obligations. These risks to large parts of the U.S. economy are occurring despite major U.S. investments in chip manufacturing intended to avoid precisely this type of supply chain disruption.
We urge the Administration to work with memory chipmakers and chip buyers to assess steps that can be taken to address this imbalance in the memory market and protect against harm to consumers, workers, and businesses of all sizes. Among other things, we urge the Administration to consider measures to:
- Support faster and larger expansion of memory chipmaking capacity in the United States and in allied jurisdictions;
- Utilize mechanisms under trade and investment deals struck by the Administration that commit partners to cooperate on supply chain resilience and invest in critical U.S. industries;
- Ensure that memory semiconductor capacity adequately serves all segments of the market, including consumer-facing and manufacturing industries;
- Examine whether the implementation of CHIPS Act and related or similar programs can be utilized to advance the above objectives;
- Ease constraints on alternative sourcing or product redesign in response to memory chip disruptions, such as expedited validation and approval for regulated products and accommodation for any necessary changes to products’ hardware, firmware, or software;
- Identify and eliminate regulatory barriers to the growth of memory capacity domestically and in foreign jurisdictions to increase the aggregate stock of global memory supply; and
- Closely track conditions in the memory market, including with respect to supply and demand.
Our organizations stand ready to work with you to discuss solutions that may mitigate this quickly developing situation in the short, medium, and long term. We share the Administration’s determination to bolster the strength of the U.S. economy, resilience of our supply chains, and prosperity of our citizens and businesses.
Sincerely,
NCTA—The Internet & Television Association
ACA Connects—America’s Communications Association
NTCA—The Rural Broadband Association
Telecommunications Industry Association
Medical Device Manufacturers Association (MDMA)
AdvaMed
Alliance for Automotive Innovation
Retail Industry Leaders Association
National Retail Federation
