SEOUL/HONG KONG: Explosive demand for AI infrastructure is driving sharp increases in DRAM and NAND memory chip prices, dimming the growth prospects for smartphones, PCs, laptops, wearables, and gaming devices.
Analysts warn that manufacturers face a tough choice: absorb higher costs and squeeze margins or pass them on to consumers, risking weaker demand.
AI Build-Out Absorbs Supply
The rapid expansion of data centers by companies like OpenAI, Google, and Microsoft has consumed much of global memory chip production. Chipmakers Samsung, SK Hynix, and Micron are prioritizing higher-margin AI/server components over consumer devices, creating shortages and price surges.
Price Jumps Hit Hard
Counterpoint Research estimates memory prices will rise another 40% to 50% in Q1 2026, following a roughly 50% increase last year. Some products saw up to 1,000% inflation in recent quarters, with costs still climbing.
Fusion Worldwide president Tobey Gonnerman warned consumers should expect “significantly higher prices” for laptops, phones, wearables, and gaming gear soon.
Widespread Impact on Makers
Low- and mid-range device producers—such as Chinese smartphone brands Xiaomi and TCL, and PC firms Lenovo and Dell—are hit hardest.
TrendForce reported Dell and Lenovo planning up to 20% price hikes early in 2026.
HP CEO Enrique Lores confirmed PC price increases due to “significant” memory costs.
Raspberry Pi described the surge as “painful” in a recent blog announcing raises.
Shares of Xiaomi, Dell, HP, Lenovo, and Raspberry Pi fell sharply in late 2025.
Premium Players More Resilient
Apple is better positioned thanks to scale, pricing power, and locked-in supplier contracts, though not immune.
eMarketer analyst Jacob Bourne noted manufacturers may absorb some costs, but the shortage scale will likely lead to higher consumer prices.
Market Forecasts Turn Gloomy
Global smartphone sales are projected to shrink at least 2% in 2026—the first annual decline since 2023.
PC shipments could fall 4.9%, and console sales 4.4%, reversing prior growth.
The trend underscores how AI-driven demand is rippling through consumer tech supply chains.