Device prices could rise as AI eats up memory chips: NPR

Thanks to artificial intelligence, the world is suffering from memory loss.

The explosion of AI-related cloud computing and data centers has created such a high demand for certain types of memory chips that they are now in short supply. This imbalance is expected to start impacting the prices of all types of technology-enabled products.

“I keep telling people, if you want a device, buy it now,” said Avril Wu, senior research vice president at TrendForce, a Taiwan-based consultancy that studies the market for computer components. “I myself have already purchased an iPhone 17.”

This chip is known as RAM (Random Access Memory) and is essential for things like smartphones, computers, and gaming consoles to run smoothly. The chip allows you, for example, to keep multiple tabs open in your browser or watch videos without interruption.

Wu said TrendForce data shows demand for RAM chips exceeds supply by 10%, and it's growing so fast that manufacturers are having to spend even more money to buy RAM chips each month.

Wu said that in this quarter alone, companies are paying 50% more for the most common type of RAM, known as DRAM (dynamic random access memory), than in the previous quarter. And if producers want to get their chips faster, they will pay 2-3 times more.

Wu expects DRAM prices to rise another 40% in the next quarter and does not expect prices to fall in 2026.

How does AI consume memory?

AI data centers require large amounts of memory accompanied by state-of-the-art graphics processing unit (GPU) microprocessors to train and manipulate AI models.

“AI workloads are built around memory,” said Sanchit Vir Gogia, CEO of technology advisory firm Greyhound Research.

Additionally, AI companies are spending billions of dollars building data centers around the world at breakneck speed. That's why Gogia says demand for these chips isn't just a cyclical spike.

“AI has changed the nature of demand itself,” he said. “Training and inference systems require large, persistent memory footprints, extreme bandwidth, and proximity to the compute. This cannot be reduced without compromising performance.”

More chips for AI means fewer chips for other products

Idaho-based Micron Technology is one of the world's top manufacturers of RAM and is benefiting from this increased demand. Last week, the company announced better-than-expected quarterly profits on the back of rising memory chip prices.

CEO Sanjay Mehrotra said he expects the market to remain strong as the AI ​​boom continues rapidly. “We believe industry-wide supply will continue to be significantly lower than demand for the foreseeable future,” he said in a post-earnings webcast.

Chip makers like Micron shift production Analysts say the move is aimed at meeting lucrative AI-related demand for high-end memory as much as possible. This means fewer chips for other segments of the market, such as consumer products such as computers, mobile phones, games, and televisions.

And that means increased costs. Jeff Clarke, Chief Operating Officer of Dell Technologies, said: Financial report As for PCs, “I don't see why this doesn't definitely penetrate the customer base,” he said.

Analysts say there is no short-term solution.

Technology consultant Wu said the memory chip industry is facing a significant bottleneck. By the end of 2026, he said, chipmakers will reach the limit of how much they can ramp up production in their current facilities.

He said the next new factory scheduled to open is being built in Idaho by Micron. The company plans to start operations in 2027.

Wu said he expects suppliers to continue raising prices for some time.