AI boom triggers global memory chip shortage, raising device prices
What's the story
The Consumer Electronics Show (CES) has highlighted a growing concern among gadget makers: a global shortage of Dynamic Random Access Memory (DRAM). This essential component is used in computers, smartphones, and gaming consoles to run applications or multitask. The shortage is mainly due to the increasing demand from artificial intelligence (AI) across various devices, including data centers and wearables.
Revenue surge
Tech giants report record revenues amid memory chip shortage
Samsung Electronics has projected a massive jump in sales revenue for the final quarter of 2025, expecting it to hit 93 trillion Korean won. The company's forecast comes as prices for memory chips continue to rise with demand. Similarly, US-based Micron Technology, a leading manufacturer of advanced semiconductor memory and storage products, reported a record revenue of $13.6 billion in its last fiscal quarter.
Ongoing impact
DRAM shortage could persist into 2026
The memory chip shortage is so severe that market tracker IDC predicts it could continue well into next year. This is largely because DRAM and memory chip manufacturers have redirected their production capacity to meet the needs of AI data centers. The increased demand for AI features in all kinds of products has also contributed to the surge in need for DRAM and memory across devices from laptops to smart rings.
Adaptation strategies
Gadget makers adapt to memory chip shortage
In light of the ongoing memory chip shortage, gadget makers are resorting to several strategies. These include paying a premium for DRAM and memory, redesigning their products, or even dropping some features altogether. Michal Siwinski from Arteris said this could mean sacrificing certain capabilities in products due to insufficient memory resources.
Industry impact
Memory chip shortage raises concerns across industries
The memory chip shortage has raised alarms in other sectors as well, especially those relying on semiconductors for AI. Infineon Technologies CEO Jochen Hanebeck said these powerful semiconductors have "nothing to do" with DRAM but companies are wary of any potential spillover effects. He added customers are asking about capacities due to the challenges posed by this supply chain issue.