Manufacturers and analysts are warning that consumers may face price hikes of 5% to 20% across a wide range of electronic goods this year, due to surging memory chip costs driven by the booming artificial intelligence sector.

Companies such as Dell, Lenovo, Raspberry Pi, and Xiaomi are feeling the heat, reporting mounting pressure on production costs. Dell noted that input costs are rising at an unprecedented pace, with the burden inevitably shifting to end-users.

UK-based computer maker Raspberry Pi described current cost pressures as “painful,” after it raised prices at the end of last year. Lenovo, the world’s largest PC maker, said it is stockpiling memory chips and other vital components in anticipation of prolonged supply risks.

Analysts point to the explosive wave of global data center construction to support AI models as the root cause. The demand for high-bandwidth memory (HBM) chips has skyrocketed, prompting semiconductor manufacturers to prioritize server-grade products over lower-tier chips used in consumer electronics.

As a result, the market is now facing a severe shortage of DRAM, a key component in computers, smartphones, and many other devices. Manufacturers are racing to stockpile chips, further inflating semiconductor prices. According to Macquarie, the scarcity is so widespread that buyers are willing to pay a premium to secure supply.

Market research firm TrendForce reported that average DRAM prices - including HBM - jumped by 50% to 55% in Q4 2025 compared to the previous quarter. Samsung and SK Hynix, the world’s two largest memory chip makers, control over 70% of the DRAM market and say 2026 orders have already outstripped their production capacity. Samsung has raised prices for some chips by as much as 60%.

A Samsung representative noted that AI-related server demand is accelerating far beyond what the industry can supply. This leaves consumer electronics manufacturers in a weak bargaining position as they compete with tech giants and cloud providers like Amazon and Google, who are securing long-term chip contracts for their data centers.

Analysts predict that consumers will ultimately bear the cost. Macquarie estimates electronics prices could rise by 10% to 20% in 2026, while Nomura suggests the increase may be around 5% - if companies can cut costs elsewhere.

According to Morgan Stanley, U.S. tech corporations are projected to spend around $620 billion on AI infrastructure in 2026, up from $470 billion in 2025. Global spending on AI data centers and related hardware could reach $2.9 trillion by 2028.

In November 2025, Lu Weibing, President of Xiaomi’s smartphone division, warned that supply chain pressures in 2026 could be even worse than the previous year. Some experts caution that the worst-case scenario might resemble the supply disruptions seen during the pandemic.

Although Samsung and SK Hynix have announced plans to expand production, those projects will take at least two to three years to come online. In the short term, analysts say electronics manufacturers face a difficult choice: raise retail prices or sacrifice profit margins.

Du Lam