A growing shortage of memory chips driven by demand from AI data centres could trigger significant price increases for consumer goods and disrupt global supply chains, according to industry groups.

In a letter to the U.S. Treasury and Commerce Departments, organisations representing automakers, retailers, electronics firms, and other sectors warned that an “urgent imbalance” in the memory chip market could lead to sustained near-term price rises for American households and widespread supply chain disruption.

They said the surge in demand from AI infrastructure has already caused sharp price increases and reduced availability of chips needed for manufacturing across multiple industries.

Signatories to the letter include the Alliance for Automotive Innovation, the National Retail Federation, the Medical Device Manufacturers Association, NCTA, and the Telecommunications Industry Association.

The groups urged government attention, noting that the effects are already being felt across consumer electronics, telecom infrastructure, automotive production, and medical devices.

The letter also highlighted broader risks, including rising costs for maintaining digital infrastructure and reduced availability of key products.

Meanwhile, market research firm Counterpoint Research expects the global smartphone market to contract sharply, citing a worsening memory chip shortage that is hitting entry-level devices hardest as manufacturers prioritise AI-related demand.

The Commerce and Treasury Departments, along with the Semiconductor Industry Association, have not yet commented.