Key facts
- Demand for AI-related high-bandwidth memory (HBM) is causing a shortage of conventional RAM and DRAM.
- Prices for RAM have surged, with some components increasing fivefold in a year.
- This chip crunch, nicknamed 'RAMaggedon,' is impacting consumer electronics like laptops and smartphones.
- Automakers are also experiencing rising costs for in-vehicle computer systems.
- The shortage is projected to persist through 2028, according to Samsung Electronics' CFO.
The global demand for artificial intelligence is driving a significant shortage of computer memory chips, leading to price hikes for consumer electronics and potentially impacting the automotive sector. This phenomenon, dubbed 'RAMaggedon,' stems from chip manufacturers prioritizing the production of high-bandwidth memory (HBM), essential for training and running AI systems, over conventional RAM and DRAM.
Retailers in Hong Kong have reported a halving of business as prices for components like RAM have surged dramatically, with 16GB of RAM now costing up to HK$1,500, a substantial increase from its previous HK$300-400 range. Analysts note that memory prices for PCs and smartphones have risen five to six times higher than a year ago. This surge has translated into significant profits for major memory chipmakers like Samsung Electronics, SK hynix, and Micron.
China's ChangXin Memory Technologies (CXMT) recently saw its shares soar in a blockbuster Shanghai listing, underscoring the sector's intense activity. While CXMT is considered a follower in leading-edge technologies, the current supply-constrained market for conventional RAM and DRAM could offer it a 'late-mover advantage.' Customers are adapting by upgrading existing devices or opting for less powerful components to manage costs.
Carmakers are also bracing for increased expenses related to in-vehicle computer systems, which could soon lead to higher new vehicle prices. In Tokyo, custom PC builders are finding component prices at 'ridiculous levels,' forcing some to require clients to purchase their own parts. The shortage is also influencing purchasing decisions, with some consumers opting for laptops with shorter lifespans over more durable desktops, a trend driven by what is perceived as an AI-driven 'speculative bubble.'