RAM Shortage Drives Up PC and Phone Prices
▼ Summary
– A global memory shortage is expected to persist into 2027, ending an era of cheap and abundant memory and storage.
– The shortage is driven by memory makers like Micron and Samsung prioritizing AI companies, which are buying vast quantities for data centers.
– Smartphone prices are expected to rise significantly, especially for budget brands like Xiaomi, which have little room to absorb the higher RAM costs.
– Major PC manufacturers, including Dell and HP, have confirmed incoming price hikes due to the shortage, compounded by the shift to AI PCs and Windows 10’s end of support.
– The IDC forecasts the average selling price of phones and PCs to increase by 3-8%, depending on whether a moderate or pessimistic scenario unfolds.
A significant and persistent shortage of memory chips is poised to make your next computer or smartphone more expensive. According to a new industry report, this global RAM crunch is expected to last for several years, fundamentally shifting the market away from the era of inexpensive and plentiful memory. The primary driver is a massive surge in demand from artificial intelligence companies, which are purchasing enormous quantities of memory for their data centers, leading major manufacturers to reallocate their production capacity.
The price of RAM has skyrocketed over the past few months as the world’s leading memory producers, Micron, Samsung, and SK Hynix, direct more resources toward supplying the AI sector. While PC enthusiasts upgrading their systems were among the first to notice tighter supplies and higher prices, the impact is now spreading to a much wider range of consumer electronics.
For smartphones, the situation is particularly acute. A device’s final cost is heavily influenced by the memory it contains, and rising RAM prices are forcing manufacturers to make difficult choices. Companies will likely need to raise prices significantly, cut specifications, or both. Brands like Xiaomi, Oppo, Vivo, Honor, and Huawei, which focus on budget-friendly models, have limited options. These firms have already optimized their components to keep costs down and possess little flexibility to substitute cheaper parts. We are already seeing early signs of this shift, with Xiaomi and Honor increasing tablet prices, and Xiaomi signaling that smartphone price hikes are on the horizon.
In contrast, industry giants Samsung and Apple may be somewhat insulated from the immediate shock. These companies possess the scale and supply chain influence to secure memory supply 12-24 months in advance, giving them a buffer against short-term market volatility. This advantage might lead them to be more conservative with memory upgrades in their flagship phones, rather than dramatically increasing the amount of RAM included. Overall, analysts project the average selling price of smartphones could increase by 3 to 8 percent, depending on the severity of the shortage.
The personal computer market is facing a similar squeeze at a challenging time. The memory shortage coincides with Microsoft ending support for Windows 10 and aggressively promoting new AI-powered PCs that require more memory. This combination creates a “perfect storm” for the PC industry. Major manufacturers, including Dell, HP, Acer, and Asus, have already confirmed that price increases are imminent for their computers and laptops.
This trend presents a specific dilemma for makers of AI-focused devices, such as Microsoft’s Copilot Plus PCs. These machines are required to have a minimum of 16GB of RAM, leaving companies with the tough choice of raising prices or reducing the memory in their systems to maintain margins. While current market forecasts for PC shipments remain unchanged, the cost to consumers is expected to climb. Estimates suggest the average selling price of PCs could rise between 4 and 8 percent, mirroring the potential increases seen in the smartphone market.
(Source: The Verge)
