The global memory chip market is experiencing a significant shortage, driven by surging demand from artificial intelligence (AI) data centers. This has resulted in a sharp increase in prices for key components used in phones, computers, and data centers. The shortage is affecting both main memory families, including RAM-type chips and storage chips used in solid-state drives (SSDs) and device memory.
According to industry tracking, prices for RAM modules have doubled in some segments, while spot prices have increased roughly threefold this year. Consumers are already feeling the impact, with many widely sold PC memory kits now costing 50-100% more than they did in the summer. Some standard 32GB upgrades are approaching $400 at major retailers.
The primary driver of the price surge is the demand for advanced memory chips from AI data centers. These centers require far more memory than ordinary systems, leading to oversized orders from major tech firms. The three dominant memory makers – Samsung Electronics, SK Hynix, and Micron Technology – are prioritizing the production of premium, ultra-fast memory chips for AI accelerators, diverting their most advanced production away from “everyday” chips for phones, PCs, and consumer storage.
This shift in production is exacerbating the shortage, which is also being felt due to the industry’s recovery from a 2022-2023 downturn. During this time, manufacturers cut output after selling memory below cost, and supply is still recovering. The construction of new factories takes years, making it challenging for supply to catch up quickly.
The shortage is having a significant impact on consumers, with retailers in parts of Asia limiting sales of hard-disk drives to curb hoarding. Electronics brands are warning that higher memory costs will feed into device prices. Consumers are starting to feel the crunch through everyday gadgets, with China’s Xiaomi and Realme warning that memory costs are rising so quickly they may have to lift smartphone prices.
Analysts expect the shortage to persist, with demand from AI and cloud data centers continuing to outpace output. Suppliers are raising contract prices, indicating that availability is likely to stay constrained into the first half of next year. If the imbalance persists, the fallout could be significant, with limited memory supply potentially delaying large data-center projects and slowing some AI rollouts. Higher component costs could also continue to feed into smartphone, PC, and cloud-service prices, adding pressure across the global tech market.