As AI and consumer electronics companies compete for a dwindling supply of memory, consumers are expected to absorb the sharp cost increases, reports Reuters.
Exclusive reporting by the news agency details the global scramble by tech firms and sharp price increases in Asia caused by the shortage of memory products. Tech giants like Microsoft, Google, Amazon and Meta are pushing for open-ended orders, assuring memory maker Micron that they will take as much as it can deliver, regardless of cost, according to two people briefed on the talks.
Chinese companies like Alibaba, ByteDance and Tencent are meanwhile lobbying suppliers for allocation, sending executives to visit South Korean memory makers Samsung and SK Hynix in recent months, sources told Reuters.
While most companies did not provide comment on the memory crunch, one source told the news agency that, “Everyone is begging for supply.” For good reason. Nearly every type of memory is in short supply, from the dynamic random-access memory (DRAM) used in computers and phones to the advanced high-bandwidth memory (HBM) that power AI data centres.
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“These days, we’re receiving requests for memory supplies from so many companies that we’re worried about how we’ll be able to handle all of them,” Chey Tae-won, chairman of SK Hynix parent SK Group, said at an industry forum in Seoul last month. “If we fail to supply them, they could face a situation where they can’t do business at all.”
As the AI frenzy drove memory makers to shift production toward the high-end memory products, the sector hit a replacement cycle for traditional data centres and PCS, as well as high smartphone sales, fuelling a spike in demand for conventional memory products. SK Hynix and other firms have announced plans to expand capacity to meet demand, but new factories aren’t expected to come online until 2027 or 2028.
That means customers will be expected to pay more to cover the increased memory cost, with Chinese smartphone makers Xiaomi and Realme already warning of potential double-digit increases.
“The memory shortage has now graduated from a component-level concern to a macroeconomic risk,” Sanchit Vir Gogia, CEO of Greyhound Research, a technology advisory firm, told Reuters. The potential inflationary pressure comes at a time when many countries are already struggling to tame rising costs and navigate the Whitehouse’s mercurial tariff regime.
