- Broadband and telecom trade groups are urging the White House to act as surging memory prices threaten supply chains
- AI-driven demand and a global shortage have pushed memory prices sharply higher
- Industry groups want the government to boost domestic memory production and improve allocation across sectors
A coalition of broadband groups urged the Trump Administration to intervene as memory prices continue to rise, warning the sky-high costs could disrupt critical supply chains and construction initiatives.
NCTA, America’s Communications Association (ACA), NTCA – The Rural Broadband Association and the Telecommunications Industry Association (TIA) were among nine to sign a letter to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick highlighting the precarious situation. Medical device, retail and auto groups also signed the letter.
As Fierce has noted before, AI is driving skyrocketing demand for memory. That demand, coupled with a global supply shortage, has driven up prices more than threefold. For telecom operators, this has thrown a huge wrench into their upgrade plans.
“The real-world impacts of these trends have already begun to show themselves and threaten to deteriorate rapidly if the situation is not remedied,” the groups wrote. “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.”
Shape of the threat
The groups warned that if the government does not intercede, impacts could include “price increases for a broad range of everyday consumer electronics and information technology products” and “significantly higher costs for building, maintaining and upgrading our nation’s internet and telecommunications infrastructure.”
Indeed, trade groups aren’t the only ones who have noticed risks around rising memory prices.
In a note to investors earlier this week, New Street Research’s Pierre Ferragu noted that agentic AI is broadening memory demand beyond high-bandwidth memory to include conventional DRAM and NAND memory. Prices for those have already jumped 70-80% quarter over quarter.
“The risk to watch is demand destruction outside of AI,” he wrote. “Samsung and Hynix are already flagging softening mobile and PC demand. AI demand feels unlimited today, capable of absorbing any slack, but on that front as well, we are cautious. Demand destruction could materialize; scarcity is the mother of invention.”
What can be done?
The broadband trade groups suggested the U.S. government consider a range of actions that could help ease the pressure a bit. These include supporting faster and larger expansions of memory production capacity in the country; ensure that existing memory capacity is more evenly distributed to serve “all segments of the market”; and ease constraints on alternative sourcing or product redesigns, for instance by introducing expedited validation and approval of regulated products.
It remains to be seen how the administration will respond to the request.
President Donald Trump has championed AI throughout his second term, cozying up with tech CEOs and seeking to increase domestic energy production to meet the demands of AI data centers.
At the same time, he signed an executive order this week asking frontier model developers to give the U.S. government access to new models before they launch, citing security concerns, and has called on Congress to repeal the CHIPS Act, which was passed to fund expansions in domestic semiconductor manufacturing.