AI memory shortage to drive 625x demand surge by 2028 as PC hardware prices soar
11 Sources
[1]
Is AI's High Bandwidth Memory Crunch About to Hit Your Wallet?
While browsing our website a few weeks ago, I stumbled upon "How and When the Memory Chip Shortage Will End" by Senior Editor Samuel K. Moore. His analysis focuses on the current DRAM shortage caused by AI hyperscalers' ravenous appetite for memory, a major constraint on the speed at which large
[2]
Memory will consume 30% of hyperscaler data center spending this year, a 4X increase over 2023 -- Nvidia gets preferential supply terms well below standard market rates, says analyst firm
SemiAnalysis estimates that memory will account for roughly 30% of total hyperscaler capex in calendar year 2026, up from approximately 8% in CY23 and CY24. The firm projects that share will climb further in CY27, representing a near four-fold shift in just four years as DRAM prices surge beyond
[3]
It's not just you -- MSI's confession proves it's the worst year ever for PC hardware
After a 7-year corporate stint, Tanveer found his love for writing and tech too much to resist. An MBA in Marketing and the owner of a PC building business, he writes on PC hardware, technology, and Windows. When not scouring the web for ideas, he can be found building PCs, watching anime, or
[4]
'The squeeze is real': I spoke to RAM crisis oracle, Carmen Li, about when this nightmare ends -- here's what she told me
For months, buying a PC or upgrading your RAM has felt like a losing battle against the AI industry. Prices skyrocketed, supply vanished and consumers are left footing the bill. There are many, many reasons why this is happening, with a whole lot of data behind it -- so I turned to Carmen Li,
[5]
Dell's CEO reckons that the total memory demand from the entire AI market in 2028 will be 625x bigger than it was in 2022
Who needs DRAM in their PC anyway? Mine works on wishes and positive thoughts. Today is a Wednesday. I mention that because when it comes to news about the global memory market, you might just think that every day is now a Woesday instead. Enter Dell's CEO into the fray with an insight as to how
[6]
Samsung pushes DDR5 and HBM prices higher (30%) as AI demand persists
Samsung is reportedly increasing DRAM pricing once again, with new reports indicating an average 30 percent rise for the second quarter of 2026 across both DDR5 and HBM memory products. That follows a strong first quarter in which memory prices had already moved substantially higher compared to the
[7]
Microsoft and Google seek long term DRAM deals with SK Hynix
Microsoft and Google are negotiating three-year DRAM supply agreements with SK Hynix that include price floor guarantees and upfront deposits ranging from 10 to 30 percent of the total contract value. These agreements mark a significant change in the procurement strategy of major technology
[8]
Dell Says AI Demand For RAM Will Increase Dramatically In Future
If you were hoping for cheaper consoles and RAM sticks later this year, I got some terrible news Folks hoping that the ongoing RAM-ageddon would wind down in the near future will likely be upset to hear that the CEO of a major PC company believes it's only going to get way, way worse. The head of
[9]
Dell CEO Says AI Memory Demand Will Explode To 'Unimaginable Levels' By 2028, Leaving No Option For Buyers Other Than Paying Whatever's Demanded
Dell's CEO, Michael Dell, has discussed his estimates of the AI memory supercycle at a recent event, claiming that the explosive demand will persist for several years. We have been tracking the memory supply chain for quite some time now, noting that the supply-demand gap has widened in the past
[10]
Hyperscalers Are 'Scratching Their Heads' with Rising Memory Costs, But NVIDIA Might Be the Only One Smiling
The rising cost of memory has started to bite into the CapEx of major hyperscalers and their infrastructure buildouts, but NVIDIA enjoys an exclusive position in the supply chain. DRAM shortages have disrupted broader supply chains, affecting segments like AI and consumer markets, but,
[11]
AI driven memory demand will surge by 625 times in next two years, says Dell CEO Michael Dell
Tech companies are expected to keep investing despite costs, as AI infrastructure becomes essential for future growth. Rising memory chip prices are beginning to impact everyday technology, including smartphones, laptops, and servers. The situation may worsen as demand driven by AI growth
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Dell's CEO predicts total memory demand from AI will increase 625 times between 2022 and 2028, driven by expanding AI accelerator memory requirements and massive data center buildouts. The High Bandwidth Memory shortage is already forcing DRAM price increases exceeding 100%, with memory consuming 30% of hyperscaler spending in 2026—up from just 8% in 2023.
AI Accelerator Memory Demand Reshapes Global Supply Chain
The AI memory shortage has reached a critical inflection point, with Dell CEO Michael Dell projecting that total memory demand from AI will surge 625 times between 2022 and 2028
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. This staggering forecast stems from two parallel trends: Nvidia's flagship AI accelerators expanding from 80 GB of High Bandwidth Memory in the H100 to an estimated 2 TB by 2028, while data center deployment rates multiply by approximately 25 times over the same period. The calculation reveals an unprecedented shift in how memory resources are allocated across the technology sector, with hyperscaler demand fundamentally altering production priorities at the world's three major HBM manufacturers—SK Hynix, Samsung, and Micron5
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Source: Wccftech
Memory Cost Inflation Consumes 30% of Hyperscaler Spending
SemiAnalysis estimates that memory will account for roughly 30% of total hyperscaler capital expenditure in calendar year 2026, representing a dramatic escalation from approximately 8% in both 2023 and 2024
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. This near four-fold shift reflects how High Bandwidth Memory remains massively undersupplied through 2027, constituting a massive share of the approximately $250 billion in incremental hyperscaler spend projected for this calendar year. The AI-induced supply crunch has created what Dell COO Jeff Clarke described as "unprecedented" cost movement during the company's Q3 2025 earnings call2
. DRAM price increases are expected to more than double in 2026, with another double-digit increase projected for 2027, while LPDDR5 contract pricing has already risen more than three times since Q1 20252
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Source: Tom's Hardware
PC Hardware Price Hikes Spread Across Consumer Electronics
The RAM crisis has triggered widespread PC hardware price hikes, with MSI general manager Huang Jinqing calling 2026 "the most challenging year since the company was founded"
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. MSI plans to increase prices across gaming products by 15-30% this year, while prioritizing DDR4 motherboard production over DDR5 models—a complete reversal from its previous strategy of producing four times as many DDR5 boards3
. Consumer electronics prices have surged across categories: a 32GB kit of DDR5-6000 RAM that cost around $100 now exceeds $400, while 2TB consumer SSDs jumped from $120 to $300-$3503
. Graphics cards from Nvidia have seen 20-25% price increases for models like the RTX 5070 and RTX 5070 Ti, while AMD's RX 9060 XT 16GB jumped by up to 30%3
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Source: XDA-Developers
Nvidia Secures Preferential Supply Terms While AMD Faces Exposure
SemiAnalysis revealed that Nvidia receives "Very Very Preferred" DRAM pricing from suppliers, well below rates paid by both hyperscalers and the broader market
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. This preferential treatment compresses Nvidia's server cost exposure and pushes down overall market pricing benchmarks, masking the severity of the supply crunch for other buyers. AMD sits on the opposite side of this dynamic, with its AI accelerator SKUs generally carrying higher memory content per unit while lacking the same supplier leverage. Operating at far lower AI accelerator volume than Nvidia makes AMD "structurally more exposed at a time when it operates at far lower AI accelerator scale"2
. B200 prices are set to rise by up to 20% by year-end, driven largely by memory cost inflation2
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Data Centers Drive HBM Production Shift
The hyperscaler buildout has fundamentally reshaped manufacturing priorities, with firms like Google, Microsoft, OpenAI, and Anthropic underwriting an unprecedented expansion of data centers
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. Meta's 5-gigawatt Hyperion site in Louisiana exemplifies the scale of these facilities, while a fully equipped Nvidia GB200 NVL72 AI server tower can house as much as 17 TB of DRAM and 547 TB of NAND flash storage5
. Samsung, SK Hynix, and Micron have all diverted production capacity toward HBM and high-margin enterprise DRAM, leaving conventional DDR5 and LPDDR5 supply constrained2
. New fab capacity from Micron's $9.6 billion Hiroshima HBM facility and SK Hynix's Icheon and Cheongju expansions won't deliver meaningful output until 2027 or 2028 at the earliest2
.Signs of Relief Emerge as Market Dynamics Shift
Recent data from Silicon Data shows a divergence emerging in memory markets, with server-grade DDR5 RAM increasing by 4.5% while consumer chips fell by 7.8%
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. Carmen Li, founder and CEO of Silicon Data, noted that while GDDR6 prices jumped around 21% last month alone, some consumer DDR5 retail prices have dropped 20% recently4
. This shift reflects improved efficiency in AI operations, with technologies like Google's TurboQuant compressing AI's working memory by 6x while making it 8x faster, drastically easing pressure on global DRAM supplies4
. Additionally, tariffs and trade policy changes, including a U.S. Court of International Trade ruling requiring $130 billion in tariff refunds to companies like Dell and Asus, may provide some pricing relief4
. Industry observers are watching for signals from the big three HBM companies about production schedule adjustments, while data centers may steer toward hardware that sacrifices some performance for less memory1
.References
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