The rapid expansion of AI infrastructure has sharply increased demand for memory chips, leaving fewer components available for consumer electronics. As a result, manufacturers are facing rising production costs that are increasingly being passed on to buyers.

To build and operate AI systems, technology companies including Nvidia, AMD and Google are purchasing large volumes of RAM and DRAM chips for data centres. This has tightened supplies for PCs and smartphones, pushing component prices higher.

Apple has already responded by raising prices on selected MacBook and iPad models to offset higher component costs.

The iPhone maker has described the memory shortage as a major challenge, warning that prices could continue rising if supply conditions do not improve.

According to Jefferies Equity, memory chip prices are expected to increase by 40-50% in the third quarter of 2026, followed by a further 30-40% rise in the fourth quarter compared with the previous quarter.

Prices could climb another 40-45% in 2027 before easing once new manufacturing capacity comes online, which is not expected until 2028.

Analysts say most production capacity at leading memory suppliers Samsung, SK Hynix and Micron has already been committed to long-term contracts with cloud service providers, leaving limited supply for the consumer electronics market.

Gartner forecasts that global PC prices could rise by around 17% this year, while smartphone prices are expected to increase by about 13% compared with last year.

The higher costs could also affect product features. Gartner senior research director Ranjit Atwal said AI capabilities that require large amounts of memory will become increasingly expensive to implement.

To reduce costs, manufacturers may remove certain AI features from mid-range devices or reserve them for premium models.

Consumers could also face product shortages. Jon Gold, vice-president of the US National Retail Federation, warned that limited memory chip supplies may leave major retailers such as Best Buy, Amazon and Walmart with fewer products and configuration options.

As prices continue rising, more consumers are expected to delay replacing their devices, extending ownership from the traditional two to three years to four or five years, or even longer.

Gartner estimates this trend could reduce global PC shipments by 10.4% and smartphone shipments by 8.4% this year.

Some had expected Chinese memory chip makers such as CXMT and YMTC to ease the supply shortage. However, Jefferies believes that is unlikely because their products are not significantly cheaper than those of established manufacturers and most of their output is reserved for China's domestic market.

Analysts expect memory chip prices to remain elevated in the near term, meaning consumers should carefully consider the timing of new device purchases as PC and smartphone prices are likely to stay high through at least the end of 2027.

Du Lam