Demand for Increased Memory Production! US Industry Groups Send Letter to Trump Administration, Urging Action on AI-Induced Storage Chip Supply Crisis

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The expansion of artificial intelligence data centers is intensifying the global imbalance between supply and demand for memory chips, with its impact spreading from the technology sector to traditional manufacturing industries such as automotive, medical devices, and retail.

On Wednesday, nine U.S. trade associations representing multiple industries jointly sent a letter to Treasury Secretary Besant and Commerce Secretary Howard Lutnick, warning that the memory chip shortage is threatening the stability of key supply chains and may drive up consumer prices in the short term. These groups include the Alliance for Automotive Innovation, the Medical Device Manufacturers Association, and the National Retail Federation.

The groups pointed out in the letter that the expansion of AI data centers is occupying too much of the memory chip production capacity, causing chip prices to "unprecedentedly soar," and squeezing the available supply for manufacturing and consumer goods industries.

They called on the Trump administration to collaborate with chip manufacturers and buyers to expand production capacity in the U.S. and allied countries, and suggested using trade agreement mechanisms or projects under the "CHIPS Act" to ensure supply chain security.

AI Demand Reshapes Memory Market Structure

The root cause of the memory chip shortage lies in AI’s rapidly growing demand for computing power.

Chip designers such as Nvidia and AMD are buying high-bandwidth memory at premium prices for building AI hardware, prompting memory suppliers to prioritize capacity for these customers. Consequently, demand for other types of memory products from traditional industries such as automotive and consumer electronics has been continuously squeezed.

This change in demand structure is directly reflected in capital market performance. Last month, the market value of Micron Technology and SK Hynix both exceeded one trillion dollars. Micron’s share price has risen more than 278% so far this year, ranking as the second strongest stock in the S&P 500 index.

Slow Progress in Expanding Supply

Facing the capacity gap, current solutions are still limited by long construction cycles.

Micron is advancing production expansion in New York and Idaho, but most new capacity will not be operational for several years.

Meanwhile, Commerce Secretary Lutnick is pressuring South Korea’s two memory giants—SK Hynix and Samsung Electronics—to build factories in the United States.

Currently, Samsung is constructing a logic chip plant in Austin, Texas, and SK Hynix plans to set up a packaging plant in Indiana, but Micron is the only company producing memory wafers domestically in the U.S.

Political Pressure Continues to Rise

This joint industry letter is not an isolated incident, but a continuation of a series of warning signals.

In April this year, Ohio Republican Senator Bernie Moreno wrote to the Commerce Department, requesting priority for domestic memory component demand, ensuring sufficient supply for the U.S. automotive industry, and warning that memory chip prices may rise as much as 100% this year.

The trade groups emphasized in their letter that, while the development of AI is crucial for America’s technological leadership, policy must also ensure that other key industries are not impacted by market imbalances.

The letter specifically mentions the risk of rising consumer electronics prices, increasing costs for internet and telecom infrastructure, supply shortages for finished products such as automobiles and medical devices, and difficulties faced by companies undertaking federal procurement contracts—especially small enterprises—in fulfilling their obligations.

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