Over the past few months, demand for memory chips has surged significantly due to AI data centers. RAM prices have been rising steadily over the past few weeks, increasing the prices of many electronic devices. But the worst may be yet to come, according to Dell CEO Michael Dell. He thinks we may reach a point where companies have to pay manufacturers’ prices for memory chips.
Speaking at a recent Bank of America event, Michael estimated that total memory demand in AI infrastructure could reach unprecedented levels by 2028. “As memory per accelerator and system size increase simultaneously in AI infrastructure, a structure is forming where total memory demand will increase by approximately 625 times,” he said, as quoted by ET News.
However, memory supply capacity may not be able to accommodate this increased demand. Dell added, “While it will take years to scale the supply of memory, the demand for current AI infrastructure is unabated.”
Demand for memory chips increases 625 times
Michael Dell explained the logic behind the 625x increase. He claimed that memory per AI accelerator is expected to grow approximately 25 times to 2TB by 2028, from 80GB in 2022 with Nvidia’s H100.
At the same time, the number of accelerators deployed is expected to increase by 25 times. Multiplying both numbers yields 625.
This combined growth will significantly increase the demand for DRAM and related memory technologies. Apart from memory chips, GPUs, which can provide the high computing power needed for AI data centers, are also in great demand, especially from the likes of Nvidia.
Companies could pay more for memory chips
Rising RAM prices can make products more expensive and deter consumers from purchasing new products. But Dell chiefs say companies may not have a choice. “It doesn’t make sense for a knowledge worker making $100,000 a year to have an outdated PC or an inefficient system,” he explained.
Michael Dell argued that companies would be willing to pay higher rates just to ensure that their employees had the best resources available. He added: “When it comes to productivity, companies have no choice but to invest in infrastructure.”
The Dell CEO added, “The question is not ‘if to buy,’ but ‘when to buy.'”
The impact of this increased demand is also changing the memory industry. Micron, one of the three largest memory chip makers, announced late last year that it would withdraw from the consumer memory business and focus on data center chips.
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