AI and Tech Struggle as Memory Chip Prices Soar Worldwide

A severe global shortage of memory chips is affecting artificial intelligence, consumer electronics, and tech industries, forcing companies to compete for limited supplies. Prices for these essential components, which allow devices to store data, have surged. Japanese stores have started limiting the number of hard drives customers can buy, while Chinese smartphone makers warn of higher costs. Major tech firms like Microsoft, Google, and ByteDance are working with chip makers including Micron, Samsung Electronics, and SK Hynix to secure memory supply.

The shortage affects nearly every type of memory, from flash chips used in smartphones and USB drives to high-bandwidth memory (HBM) that powers AI processors. In some segments, prices have more than doubled since February, according to market research company TrendForce. Traders are speculating that prices may continue rising. Economists warn that the shortage could slow AI-based productivity gains and delay billions of dollars in digital infrastructure projects. The crisis may also increase inflation pressures in economies already facing price challenges.

The supply squeeze results from high demand for advanced memory for AI, particularly from Nvidia and tech giants like Google, Microsoft, and Alibaba. Chip makers are focusing on producing high-margin products such as HBM for AI, which has reduced the availability of conventional memory for smartphones, PCs, and consumer electronics. Inventory levels for DRAM — the main memory type used in computers and phones — fell to two to four weeks in October, compared to 13 to 17 weeks in late 2024.

SK Hynix has stated that the shortage may continue until late 2027. Samsung and SK Hynix are investing in new production capacity, but it will take years to meet the growing demand. OpenAI signed deals with Samsung and SK Hynix to supply chips for its Stargate project, which will require double the current global production of HBM by 2029.

Chinese companies like Alibaba, ByteDance, and Tencent are also seeking priority allocation of memory chips. Electronics stores in Tokyo, including the PC shop Ark, have set purchase limits for customers to prevent hoarding. Prices for 32GB DDR5 memory kits have jumped from around ¥17,000 in October to over ¥47,000, and 128GB kits have doubled to about ¥180,000.

Smartphone makers, such as Xiaomi and Realme, warn that higher memory prices may force them to increase phone prices by 20% to 30% by mid-2026. PC makers are also facing challenges, with Taiwanese laptop brand ASUS managing only about four months of inventory. Distributors and traders are adjusting rapidly to price changes, sometimes updating quotes daily or even hourly. The shortage has even boosted the secondhand market for memory chips, where sales have surged due to high demand.

The global memory chip shortage is reshaping the technology industry, impacting AI projects, smartphones, PCs, and consumer electronics. The market is facing rising costs, limited supply, and pressure on tech companies to secure critical components. While chip makers are expanding production, solutions will take years, meaning shortages and high prices may continue for the foreseeable future.