Khaberni - The consumer electronics industry faces an unprecedented challenge as the global memory chip shortage worsens, with factories shifting their priorities towards serving artificial intelligence data centers, at the expense of chips used in laptops and smartphones.
The rapid expansion of artificial intelligence infrastructure is creating a growing gap between supply and demand in the memory chip market, putting consumers at risk of significant price increases for their electronic devices.
The Korean companies achieve record sales amid the crisis
The world's two largest memory chip manufacturers, "Samsung Electronics" and "SK Hynix", are achieving unprecedented historic sales, coinciding with consecutive announcements about establishing new memory chip factories in several countries including Japan, Singapore, and Taiwan.
China races against time in an attempt to catch up with memory technology, particularly as it faces U.S. export restrictions that limit its access to advanced technologies.
Memory Chips: The Backbone of Electronic Devices
Memory chips are an essential part of the semiconductor family, made from silicon wafers, storing data, and delivering it to processing units that perform computing operations.
There are two main types of memory chips, Dynamic Random Access Memory (DRAM) which provides short-term memory for active programs, and NAND flash memory chips that provide long-term storage for files.
Data centers monopolize production capacity
Artificial intelligence data centers rely on an ultra-high-speed memory architecture called High Bandwidth Memory (HBM).
In this technology, "DRAM" chips are stacked vertically and placed next to the graphics processing unit, a structure necessary for operating large language models that continuously process huge datasets.
The tremendous demand from the artificial intelligence industry for "HBM" chips is driving manufacturers to shift their production capacity away from traditional "DRAM" and "NAND" chips used in consumer electronics.
Historical price hikes in the first quarter
Memory chip prices are rising at unprecedented historical rates, with research company "TrendForce" expecting "DRAM" prices to increase by 90%–95% and NAND memory prices by 55%–60% in the first quarter of 2026.
Triumvirate dominance over the global market
Three companies control more than 90% of global memory chip production: Korean "SK Hynix" and "Samsung," and American "Micron," achieving record valuations amid escalating demand.
The three companies are expanding their production in Asia, where most semiconductor manufacturing occurs. "Micron" plans additional facilities in the United States, Japan, Singapore, and Taiwan, while "Samsung" and "SK Hynix" are increasing their production capacity in South Korea.
Asian leap in the device market
The rise of artificial intelligence and the increasing demand for computing power have strongly boosted device manufacturing companies in Asia, turning the spotlight away from internet companies that have dominated the tech scene in the region for many years.
and with the combined market value of "SK Hynix" and "Samsung" archiving a historic figure for the first time exceeding the combined market value of Chinese tech giants "Alibaba" and "Tencent".
China seeks self-sufficiency despite obstacles
China imports most of its memory chips, but it strives to manufacture them locally as part of a broader push for self-sufficiency in artificial intelligence, as the United States imposed restrictions in 2024 that limit China's access to "HBM" chips to curb its progress in artificial intelligence.
and "Changxin Memory Technologies," the local Chinese "DRAM" manufacturing company, is catching up with Korean competitors in producing "HBM" for artificial intelligence chips, despite being technically several years behind.
and "SemiAnalysis" research firm expects in September that the company will capture about 15% of the global "DRAM" production by 2026.
and "Yangtze Memory Technologies," the leading Chinese company in NAND flash memory production, is building new manufacturing plants, and the company plans to expand in "DRAM" chips for artificial intelligence applications, according to "restofworld" website.
Years of waiting before the market stabilizes
Building sufficient production lines to meet the demand driven by artificial intelligence will take years, and until then, the memory crisis is expected to drive up prices for computers, smartphones, tablets, and cars.
Existential threat to low-cost phones
and "Counterpoint Research" indicates that rising memory costs may make low-cost devices economically unsustainable for electronics companies.
and some budget smartphones might be completely withdrawn from the market as profit margins shrink.
and "Counterpoint" expects a decrease in global smartphone shipments by 2.1% in 2026, with Chinese brands including "Honor", "Vivo", and "Oppo", which have large portfolios of economical models, expected to be severely affected by rising memory costs.
