A deepening shortage of memory chips is disrupting global supply chains as demand from artificial intelligence companies collides with accelerating consumer electronics sales. The scarcity has sent prices soaring, squeezed inventories, and set off a scramble among some of the world’s biggest tech firms to secure capacity before competitors do.
The crunch affects almost every segment of the memory market, from standard flash storage found in smartphones and PCs to high-bandwidth memory powering AI data centers. Market researchers say prices in key categories have more than doubled since early 2025, prompting retailers in Japan to restrict purchases and signalling what many analysts believe could become a prolonged supply-side crisis.
Tech giants including Microsoft, Google, ByteDance, Alibaba and Nvidia are racing to secure long-term supply deals with major manufacturers like Samsung, Micron and SK Hynix. Supply agreements are reportedly being negotiated at premium prices, with some firms offering open-ended purchase commitments in exchange for guaranteed allocation. Apple, Amazon and Meta are also reported to be pushing for priority access, indicating an unprecedented level of competition for components that were once seen as low-margin commodities.
Industry leaders warn the shortage could extend beyond tech. Economists say limited memory supply may slow the rollout of AI infrastructure and dampen productivity gains, while rising component costs risk feeding into inflation at a time when governments are trying to contain price pressures. Executives describe the shortfall as evolving into a macroeconomic issue rather than a simple supply chain bottleneck.
The shortage is partly the result of chipmakers shifting manufacturing capacity toward high-margin AI memory products, particularly HBM, used in powerful processors designed by Nvidia. That pivot reduced output of legacy DRAM and DDR4 chips that still underpin millions of smartphones, PCs and servers. The timing proved unfortunate, as a new replacement cycle across traditional devices and stronger-than-expected smartphone demand emerged simultaneously.
High-capacity expansion remains difficult. New plants take years to build, and companies are wary of over-producing if the current AI boom proves temporary. SK Hynix believes the supply gap could persist through late 2027, while Samsung’s planned increases in capacity may not relieve shortages until 2028.
Meanwhile, the pressure is rippling through consumer markets. Chinese brands Xiaomi and Realme have warned that smartphone prices could rise as much as 30% next year due to memory cost spikes. PC makers such as ASUS are reviewing pricing, while smaller players struggle to absorb the increases.
The shortage has also spurred a wave of speculative trading and hoarding. Electronics sellers in Tokyo report shelves running empty and dealers stockpiling inventory. Components that once sold steadily now see prices updated hourly. In China, traders are storing tens of thousands of chips, betting on further increases. In the United States, businesses that recycle used memory report surging demand from Asian brokers.
Despite the escalation, chipmakers are reporting surging profits. Shares of Micron, Samsung and SK Hynix have rallied, and financial forecasts from major suppliers suggest continued growth if pricing remains elevated. Analysts expect memory prices to rise another 20% in early 2026, extending a rally that has upended every part of the technology ecosystem.
The crisis highlights an unusual paradox: AI has accelerated demand faster than supply chains can react, while the industry’s pivot to the high-end chips powering that boom has starved traditional segments. Until capacity catches up, shortages and price hikes may become a persistent feature of the global tech economy.
