This article was initially published in the National Interest.

Americans just lived through one chip shortage. They’re about to live through another, and this one could hit their wallets even harder. The culprit this time isn’t a pandemic disrupting factories; it’s an artificial intelligence (AI) boom devouring the world’s memory chip supply. If Washington isn’t careful, the policy response could make the problem worse, not better.

Memory chips, dynamic random-access memory (DRAM), and NAND hold the data and storage for the modern economy. They sit inside laptops, cell phones, gaming consoles, cars, dishwashers, MRI machines, missile-defense systems, and the routers that carry our internet traffic. Nearly every sector Americans touch daily depends on them. And right now, the supply of that memory is being redirected, at scale, toward data centers.

According to Bloomberg Intelligence, AI accounted for just 32 percent of global DRAM consumption in 2020. That share hit 50 percent by 2025 and is projected to reach 60 percent by 2030. Other estimates put data centers’ share of 2026 memory-chip demand at roughly 70 percent.

AI Demand Is Driving Memory Chip Prices Higher

Prices have responded accordingly. TrendForce’s February 2026 forecast projected conventional DRAM contract prices would rise 90 to 95 percent in the first quarter alone, and its March update forecast another 58 to 63 percent jump in the second quarter. Spot prices for short-term memory have surged as much as 700 percent over the past year. The Wall Street Journal reports that Micron’s contract price for one data center memory chip rose from $350 to $1,300, a 271 percent increase.

American families will feel this directly as businesses pass the higher costs of memory chips onto consumers. Gartner estimates the combined price of DRAM and solid-state drives could rise 130 percent by year’s end, pushing PC prices up 17 percent and smartphone prices up 13 percent, while cutting worldwide PC shipments by 10.4 percent and smartphone shipments by 8.4 percent in 2026. IDC’s forecast is grimmer. It expects global smartphone shipments to fall 13.9 percent year-over-year in 2026, to 1.09 billion units, the steepest annual contraction on record, driven primarily by the memory shortage.

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Low-income families who depend on cheaper devices will likely suffer the most. Gartner analyst Ranjit Atwal put it bluntly, saying the increase “removes vendors’ ability to absorb costs, making low-margin entry-level laptops nonviable.” As a result, the sub-$500 PC segment could disappear by 2028. 

Why the Global Memory Chip Supply Can’t Quickly Catch Up

Granted, part of the price change is the market at work. Three companies, Micron, Samsung, and SK Hynix, control more than 90 percent of the memory market, and they’re rationally chasing higher margins in AI-grade High Bandwidth Memory. 

However, ratcheting up supply isn’t as easy as a farmer planting more corn when prices rise. It takes years to build new plants to produce more chips, and substitutes may be even further out. 

Furthermore, the structure and intricacy of the memory market, along with the barriers to entry, make it difficult to meet rising demand quickly. DRAM manufacturing is incredibly complex. Manufacturing memory requires cutting-edge fabrication processes, advanced packaging technologies, and highly specialized equipment and engineering expertise.

In addition to manufacturing complexity, market concentration creates its own challenges for market entry. The larger firms hold most of the world’s accumulated process knowledge, IP, and equipment relationships necessary to build out new capacity. Market entry from a new supplier would still likely require partnering with or licensing from one of the larger incumbents.

None of this is an argument for slowing AI or data center growth. AI is going to help cure cancer, empower a new generation of workforce, make people’s lives easier, and be a tremendous boon to local economies.  However, at a time when the cost of living is the top concern among voters and families across the country, Congress and the Trump administration can’t sit idle, either. 

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How Washington Can Ease the Memory Chip Shortage 

1. Resist protectionist policies that would worsen price impacts.

The Multilateral Alignment of Technology Controls on Hardware Act (MATCH) Act would impose export controls on Chinese memory makers CXMT and YMTC and threaten allied nations with expanded US jurisdiction if they don’t align within 150 days. By slowing global DRAM capacity at exactly the wrong moment, it would raise prices for the same American consumers it claims to protect.

2. Ease constraints on memory chips, manufacturing equipment, and raw materials.

Keep imported chips, including those from Micron’s Japan operations, entering tariff-free. Expand Section 301 exclusions for DRAM and production inputs like specialty gases and photoresist chemicals and use the ongoing trade talks with Seoul to secure multiyear export licenses and a greater DRAM share of Korean output.

3. Direct the FTC to conduct a Section 6(b) study of memory capacity allocation.

A fact-finding study, not an accusation, into how Micron, Samsung, and SK Hynix allocate capacity between HBM and DRAM would give policymakers and the public a transparent record in a market that has faced antitrust scrutiny before, including $300 million and $185 million fines against Samsung and Hynix, respectively, in the early 2000s.

4. Streamline approval pathways for alternative components.

Agencies like the Food and Drug Administration (FDA), Federal Communications Commission (FCC), and the National Highway Traffic Safety Administration (NHTSA) should create expedited review pathways for memory-component substitutions in regulated products such as medical devices, vehicles, and communications equipment. Manufacturers and companies can adapt and use subsidies without months- or years-long recertification delays.

Meeting the Needs of Consumers and the AI Boom 

Along with food, housing, health care, and energy prices, the memory chip crunch will be yet another affordability challenge facing American families and policymakers alike. The right response isn’t price controls, production mandates, or a new round of subsidies. 

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.