An acute global shortage of memory chips is forcing artificial intelligence and consumer-electronics companies to fight for dwindling supplies, as prices soar for the unglamorous but essential components that allow devices to store data.
There’s a growing strain in the global tech supply chain — stores are limiting sales, manufacturers are warning of rising costs, and major companies are rushing to secure critical components like memory chips.
The crunch covers nearly all memory types, from flash to AI-grade HBM, with prices doubling since February and traders betting the surge will continue.
The fallout could reach beyond tech. Many economists and executives warn the protracted shortage risks slowing AI-based productivity gains and delaying hundreds of billions of dollars in digital infrastructure. It could also add inflationary pressure just as many economies are trying to tame price rises and navigate U.S. tariffs.
“The memory shortage has now graduated from a component-level concern to a macroeconomic risk,” said Sanchit Vir Gogia, CEO of Greyhound Research, a technology advisory firm. The AI build-out “is colliding with a supply chain that cannot meet its physical requirements.”
Average inventory levels at suppliers of dynamic random-access memory (DRAM) — the main type used in computers and phones — fell to two to four weeks in October from three to eight weeks in July and 13 to 17 weeks in late 2024, according to TrendForce.
Investors worry AI spending may be a bubble, analysts foresee a shakeout, and chip shortages risk delaying data centers. With new capacity years away, suppliers fear overbuilding, while SK Group’s chairman warns demand is overwhelming and companies could be unable to operate without memory supplies.
OpenAI in October signed initial deals with Samsung and SK Hynix to supply chips for its Stargate project, which would require up to 900,000 wafers per month by 2029. That’s about double current global monthly HBM production, Chey said.
Samsung told Reuters it is monitoring the market but wouldn’t comment on pricing or customer relationships. SK Hynix said it is boosting production capacity to meet increased memory demand.
(With inputs from Reuters)
