See The Global Memory-Chip Shortage Will Cost Us All: AI companies’ need for a type of once-affordable microchip threatens to drive up prices of all electronics—and limit data-center ambitions by Christopher Mims.
A shortage is when the quantity demanded is greater than the quantity supplied and the price is below equilibrium. But this looks like prices are going up because demand increased. New buyers are willing to pay the higher price and maybe the old buyers are not, so they get less. That might seem like a shortage to them but it is not shortage in this market.
Excerpts:
"Behind the value of one of the world’s fastest-appreciating assets is the voracious appetite of AI companies. These same chips—mainly what’s known as RAM, but also the storage chips often called flash or solid-state memory—are required for almost every digital device on the planet."
"Prices for memory shot up 50% in the last quarter of 2025 and are projected to increase another 40% to 50% by the end of the first quarter of 2026"
"Because AI firms are crowding out other buyers of memory, unexpected consequences are likely to reverberate across countless industries. Effects could include delayed data centers, higher prices for laptops, TVs and other consumer electronics, and possible chip shortages for automakers that would delay vehicle production, in a potential repeat of the pandemic car crisis."
"Market leader SK Hynix said in late October that it had already sold out its entire inventory for all of 2026, but it announced massive investments in new manufacturing capacity, expected to be funded by the record revenues."
"Several months ago, Boise, Idaho-based Micron saw “a pretty significant surge in demand” from its data-center customers for 2026 and 2027"
"there has been a less sharp—but steady—increase in demand for all other applications, as device makers cram in ever more memory. Micron just announced it will stop producing its popular brand of PC memory to focus on supplying high-end memory for AI."
"In consumer electronics, margins are already razor-thin. Smaller manufacturers will likely have no choice but to raise prices, potentially denting demand. The situation has intensified so rapidly in the past two months that tech research firm IDC issued an update to its year-ahead forecast for smartphones and PCs because the anticipated price hikes are expected to reduce consumer demand. In the new worst-case scenario, smartphone sales in 2026 could dip 5%, and PC sales by nearly 9%, as a result of significantly higher prices for the gadgets."
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