A widening global shortage of semiconductor chips is now threatening to push the prices of consumer electronics sharply higher in 2026, according to industry and supply chain analysts (via Financial Times).
The squeeze on key components such as DRAM and other memory chips used in everyday gadgets could drive average prices for smartphones, laptops and other devices up by up to 20% this year.
The ongoing memory shortage is being driven by an extraordinary surge in demand from data centres supporting AI infrastructure, which is competing with consumer electronics makers for the same limited supplies of chips. Samsung Electronics and SK Hynix, which together control more than 70% of the global DRAM market, have reported that their planned output for 2026 is spoken for well before the year begins.
Prices for some memory chips have surged as much as 60% over the past months, reflecting the intense competition for inventory and the prioritisation of high bandwidth memory used in AI servers over the kinds of chips found in phones and personal computers.
Executives at leading electronics manufacturers say that the rising cost of memory chips is squeezing profit margins and leaving them with few options except to pass the increases on to customers. Dell’s chief operating officer noted during a recent earnings call that the company had never before seen component costs rise so quickly, and that some of that increase would inevitably show up in the retail prices consumers pay.
Analysts point to two main factors behind the current tightness. The first is the booming demand for memory chips to support artificial intelligence workloads, while the second factor is the slow pace of new production capacity coming online.
The price increases are not uniform across all types of electronics, and the impact is expected to vary by product category. Research firm Counterpoint notes that entry level smartphones may see the steepest price rises because components such as DRAM now make up a larger share of their total manufacturing cost.
In contrast, premium devices from established brands with greater pricing flexibility may be better able to absorb some of the increases without passing all costs directly on to buyers.
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Data centres that are yet to be built for technology yet to be fully accepted and that may be resting financially on a bubble creates a demand for semiconductor chips yet to be built by companies with a vested interest in the technology. Sounds less like a lack of supply and an opportunity to price gouge.
60%??? How about a 3-400% increase in price for DDR5? FFS, even DDR3 doubled…..and it's a relic.