Router Prices May Spike as Memory Costs Jump 600%

According to a new report from Counterpoint Research, the cost of DRAM and NAND memory has jumped by more than 600% over the last year, creating a massive headache for ISPs and tech manufacturers.

While we usually hear about chip shortages affecting expensive smartphones or cars, this latest “memory winter” is hitting home networking gear like routers and set-top boxes the hardest.

The primary reason for the price spike is the global boom in artificial intelligence. Tech giants are building massive AI data centers that require huge amounts of high-performance memory. To meet this demand, chipmakers like Samsung and Micron are shifting their production lines away from “standard” memory and toward the more profitable chips used in AI servers.

This shift has left smaller electronics, which use more traditional memory, in a difficult spot. Because routers and cable boxes are produced in smaller volumes than smartphones, manufacturers have less power to negotiate better prices or secure long-term supplies

The numbers behind this surge are staggering. Over the last nine months, while memory prices for smartphones have tripled, the cost of memory for broadband products has increased nearly seven times.

For a typical mid-range router, memory used to be a very small part of the cost—only about 3% of the total bill of materials. Today, that figure has ballooned to over 20%. This is a huge problem for telecom companies and equipment makers who operate on very thin profit margins.

So, what does this mean for the average Canadian consumer? While you might not see your monthly internet bill go up immediately, the “perks” of signing up for a new plan might change. For years, many ISPs have offered free installation or included a high-end router at no extra cost to attract new customers. With equipment costs soaring, these promotions may become more expensive or disappear entirely.

Furthermore, many providers were planning to launch “AI-powered” routers this year. These advanced devices are designed to automatically optimize your home Wi-Fi and improve security, but they require even more memory to function. Because of the current shortage, these smarter devices might be delayed or launch at a much higher price point than originally planned.

Industry experts expect these supply issues to last through at least June 2026. Even if prices peak in the first half of the year, it will take a long time for the supply chain to catch up.