The artificial intelligence boom has created an unexpected side effect: a severe shortage of memory chips that is driving up prices for laptops, smartphones, and even cars. The crunch, dubbed “RAMaggedon” by industry watchers, is expected to worsen before it eases, with Samsung Electronics’ chief financial officer warning that shortages will deepen in 2027 and remain tight through 2028.
The root cause is a shift by major chipmakers toward producing high-bandwidth memory (HBM), a more advanced type of memory that is essential for training and running AI systems. This pivot has diverted production away from conventional RAM and DRAM chips used in everyday devices, creating a supply squeeze that is now hitting consumers in their wallets.
Retailers feel the pinch
In Hong Kong’s bustling Wan Chai Computer Centre, vendors are struggling to explain to customers why prices have jumped so sharply. Wade Lam, manager of In-Technology Services, told AFP that shoppers “don’t know what happened.” The centre’s shops, which sell everything from computer parts to gaming consoles, have seen a noticeable drop in foot traffic.
Ken Tam, manager of Videocom Computer, which specializes in custom-built PCs, said business has halved since prices began climbing in September. Sixteen gigabytes of RAM that once cost HK$300–400 (€35–45) now sells for HK$1,500. “When it suddenly gets so expensive, customers have a psychological barrier,” Tam explained. “If they need it, they will buy it, but otherwise they will wait or lower their standards and buy a less high-performing memory chip.”
Analyst Ellie Wang at Taiwan-based TrendForce said memory prices for PCs and smartphones are now five to six times higher than a year ago. The surge has been a windfall for the world’s three largest memory chipmakers: South Korea’s Samsung Electronics and SK hynix, and US giant Micron. In fourth place is ChangXin Memory Technologies (CXMT), which became mainland China’s most valuable company on Monday after its market debut in Shanghai—another sign of the sector’s red-hot status.
CXMT, a relative newcomer, “remains in a follower position regarding leading-edge technologies,” said James Zhao, senior principal analyst at Omdia. However, when it comes to conventional RAM and DRAM, “the current supply-constrained market environment” could give CXMT “late-mover advantages,” he added.
Consumers adapt, but at a cost
Some consumers are finding creative ways to cope. Henry Wong, an investment banker shopping in Hong Kong, chose to upgrade the RAM in his older laptop rather than buy a new one with better specifications. “After upgrading the memory, I found it ran really smoothly, and I stopped wanting to buy a new computer,” he told AFP.
In Tokyo’s Akihabara tech district, Charles Brousse, a 30-year-old graphic designer from Belgium who builds custom PCs, said prices for RAM, graphics cards, and motherboards have reached “ridiculous levels.” For his “PC & Chill” service, Brousse no longer buys parts to pre-build machines because it is too expensive. Instead, he requires clients to purchase their own components, which he then assembles.
The shortage is pushing people toward cheaper laptops instead of desktops, which can last up to a decade, Brousse noted. “I’m not sure that’s a good thing; people end up buying products with shorter lifespans, which fuels a cycle of consumption.” He also expressed frustration that the price surge is driven by the “speculative bubble” of AI, “because I’m a graphic designer by trade, so AI has a real impact on my profession.”
Cars next in line
The ripple effects are extending beyond consumer electronics. Carmakers report rising costs for in-vehicle computer systems, which could soon push up the price of new vehicles. This comes as the European auto industry already faces pressure from Porsche's recent profit rise and broader supply chain challenges.
The memory chip crunch is a stark reminder of how deeply the AI revolution is reshaping global supply chains. For European consumers, the immediate impact is higher prices for everyday tech, but the longer-term consequences may be more profound, affecting everything from car purchases to the lifespan of electronic devices. As Samsung’s warning suggests, the squeeze is far from over.
