AI-Driven Memory Costs Could Make Phones and Computers More Expensive

The rapid expansion of artificial intelligence is putting unprecedented pressure on the global memory-chip industry. AI data centres require enormous quantities of high-speed memory, particularly dynamic random-access memory (DRAM) and high-bandwidth memory (HBM), to process increasingly demanding workloads. J.P. Morgan estimates that DRAM prices could rise by more than 400% between the beginning of 2024 and the end of 2026, as AI infrastructure absorbs a growing share of available production capacity.

The shortage is being intensified because major chip manufacturers are prioritising memory products used in AI accelerators and large data centres. Companies such as Samsung, SK Hynix and Micron have been directing more capacity toward higher-value AI memory, leaving less supply available for conventional memory used in smartphones, laptops and other consumer electronics. Deloitte estimates that AI-server DRAM prices roughly doubled during the first quarter of 2026 and expects the supply shortage to remain a challenge for several years.

Consumers are already beginning to feel the effects. Higher memory costs are being passed through to manufacturers and, in some markets, to customers through higher device prices. In India, for example, smartphone prices have reportedly increased substantially depending on the model, while shipments in lower-priced segments have suffered as consumers delay upgrades or move toward second-hand devices. Analysts expect elevated memory costs to continue affecting the smartphone market into at least 2027.

The pressure extends beyond smartphones. Computers, tablets, smartwatches, televisions and other electronic products also depend on memory chips, meaning manufacturers across the consumer-electronics industry could face higher production costs. J.P. Morgan estimates that prices for software and accessories and storage devices have already increased significantly since the end of 2024, while computer and peripheral import prices have also risen. The research firm warns that further increases in hardware costs could contribute to broader inflation.

The situation is unlikely to be resolved quickly because building new semiconductor production capacity takes years. Deloitte estimates that significant additional memory supply may not become available until 2029 or 2030, while analysts say demand from AI infrastructure could continue growing during the same period. As technology companies continue investing heavily in AI data centres, the competition for memory could therefore remain an important factor affecting both the technology industry and the prices consumers pay for everyday electronic devices.