Memory Chip Shortage Intensifies: Samsung Warns Supply Crisis Will Deepen Through 2027

Samsung expects memory shortage to worsen through 2027 and last until 2028

The ongoing shortage of RAM chips is not only expected to persist into the next year, but will likely intensify in 2027, with tight supply conditions lasting until at least 2028, according to Samsung, which manufactures and supplies roughly a third of the world's memory chips. Samsung said in its Q2 earnings call that frontier AI labs, desperate to obtain access to memory infrastructure, have been "sharing their medium- to long-term demand forecasts" directly with the Korean tech giant to secure future supply. The high demand enables Samsung to prioritize customers willing to sign long-term contracts. This multi-year visibility will allow the company to install equipment and ramp up production without worrying that demand will dry up, helping it avoid the memory industry's historical boom-and-bust cycles. Memory shortages driven by the AI boom have also pushed up chip prices in recent months. This has been a double-edged sword for Samsung: While sales at its semiconductor unit hit an all-time high in Q2, profitability in its smartphone and TV divisions shrank, as the higher-priced chips drove up component costs. Samsung has even started passing some of those increasing component costs on to consumers by increasing the prices of its Galaxy smartphones and tablets. However, as a result, demand for these devices has dropped. The memory shortage, informally dubbed "the RAMaggedon", has also forced Apple, Samsung's archrival, to raise the prices of its Macbooks, Macs and iPads last month. On its latest earnings call, Apple warned that revenue growth for the upcoming quarter is projected to slow to between 9% and 11% year-over-year, down from its recent 16% quarterly growth rate. With memory manufacturers shifting production capacity toward AI data centers and away from consumer electronics, consumers are facing a new reality: higher device prices. Nvidia is expected to raise its consumer graphics card prices by 20% to 30%, which may further drive up prices of gaming devices, desktop computers, consoles, laptops, and the like.

AI keeps consumer prices high in 'RAMaggedon' chip crunch

Hong Kong (AFP) - Print-outs of articles about the global memory chip shortage are pinned beside a price list at a Hong Kong computer shop, offering an explanation to confused customers feeling the pinch. Price rises for goods such as laptops and smartphones, with cars potentially next, have been an unwelcome side-effect of the artificial intelligence gold rush -- and the squeeze is far from over. Samsung Electronics' chief financial officer said this week shortages of microchips that store digital data will likely deepen in 2027 and stay tight through 2028. The crunch has been nicknamed "RAMaggedon" after the components called RAM, or "random-access memory". It is caused as profit-hungry chipmakers pivot to producing high-bandwidth memory (HBM) -- a more advanced type of computer memory in huge demand to help train and run AI tools. The articles on display at In-Technology Services -- one of many compact vendors crammed into Hong Kong's Wan Chai Computer Centre -- are to inform customers who "don't know what happened," manager Wade Lam told AFP. The centre's shops sell tech equipment of all sorts, from computer parts to gadgets and games consoles. Ken Tam, manager of Videocom Computer, which specialises in custom-built PCs, said business has halved since price rises began in September. Sixteen gigabytes of RAM used to cost HK$300-400 ($40-50) but the price has now hit HK$1,500, he said. "When it suddenly gets so expensive, customers have a psychological barrier," Tam told AFP. "If they need it, they will buy it," but otherwise they will wait, or "lower their standards" and buy a less high-performing memory chip, he said. Chinese competition Analyst Ellie Wang at the Taiwan-based market research firm TrendForce said memory prices for PCs and smartphones were up around five to six times compared to a year ago. The AI boom has brought humungous profits and share price jumps to the world's top three memory chip makers: South Korea's Samsung Electronics and SK hynix, along with US giant Micron. In fourth place is ChangXin Memory Technologies (CXMT), which became mainland China's most valuable company on Monday when it made its market debut in Shanghai -- another sign of how red-hot the sector has become. CXMT, as a relative newcomer, "remains in a follower position regarding leading-edge technologies", James Zhao, senior principal analyst at Omdia, told AFP. HBM is used in data centre servers to support other powerful chips -- such as those made by US titan Nvidia -- that execute the dizzyingly complex calculations of AI systems. But when it comes to conventional RAM, and a type for computers called DRAM, "the current supply-constrained market environment" could bring CXMT "late-mover advantages", he said. At a shopping centre in a different part of Hong Kong, customer Henry Wong, an investment banker, said he had chosen to upgrade the RAM in an older laptop instead of buying a new one with even better specs. "After upgrading the memory, I found it ran really smoothly, and I stopped wanting to buy a new computer," he told AFP. 'Bubble' Automakers say they are facing rising costs for in-vehicle computer systems, which could also soon push up the price of new vehicles. In Tokyo's tech hub of Akihabara, Charles Brousse, a 30-year-old graphic designer and custom PC builder from Belgium, said prices for RAM, graphics cards and motherboards have hit "ridiculous levels". For his "PC & Chill" service, Brousse does not buy parts to pre-build machines -- as it is too expensive -- but he requires clients to purchase their own that he assembles. The chip shortage is pushing people to buy cheaper laptops than desktops, which can last up to a decade, said Brousse, in Tokyo on his honeymoon. "I'm not sure that's a good thing; people end up buying products with shorter lifespans, which fuels a cycle of consumption." Brousse added that the fact it is driven by the "speculative bubble" of AI is also frustrating, "because I'm a graphic designer by trade, so AI has a real impact on my profession."

AI keeps consumer prices high in 'RAMaggedon' chip crunch

Memory chip prices are rising significantly due to artificial intelligence demand. This shortage is impacting consumer electronics and potentially vehicles soon. Chipmakers are prioritizing advanced memory for AI training and operations. Customers face higher costs and are delaying purchases or lowering standards. The crunch is expected to continue through 2028 impacting global markets. Print-outs of articles about the global memory chip shortage are pinned beside a price list at a Hong Kong computer shop, offering an explanation to confused customers feeling the pinch. Price rises for goods such as laptops and smartphones, with cars potentially next, have been an unwelcome side-effect of the artificial intelligence gold rush and the squeeze is far from over. Samsung Electronics' chief financial officer said this week shortages of microchips that store digital data will likely deepen in 2027 and stay tight through 2028. The crunch has been nicknamed "RAMaggedon" after the components called RAM, or "random-access memory". It is caused as profit-hungry chipmakers pivot to producing high-bandwidth memory (HBM) a more advanced type of computer memory in huge demand to help train and run AI tools. The articles on display at In-Technology Services one of many compact vendors crammed into Hong Kong's Wan Chai Computer Centre are to inform customers who "don't know what happened," manager Wade Lam told AFP. The centre's shops sell tech equipment of all sorts, from computer parts to gadgets and games consoles. Ken Tam, manager of Videocom Computer, which specialises in custom-built PCs, said business has halved since price rises began in September. Sixteen gigabytes of RAM used to cost HK$300-400 ($40-50) but the price has now hit HK$1,500, he said. "When it suddenly gets so expensive, customers have a psychological barrier," Tam told AFP. "If they need it, they will buy it," but otherwise they will wait, or "lower their standards" and buy a less high-performing memory chip, he said. Chinese competition: Analyst Ellie Wang at the Taiwan-based market research firm TrendForce said memory prices for PCs and smartphones were up around five to six times compared to a year ago. The AI boom has brought humungous profits and share price jumps to the world's top three memory chip makers: South Korea's Samsung Electronics and SK hynix, along with US giant Micron. In fourth place is ChangXin Memory Technologies (CXMT), which became mainland China's most valuable company on Monday when it made its market debut in Shanghai another sign of how red-hot the sector has become. CXMT, as a relative newcomer, "remains in a follower position regarding leading-edge technologies", James Zhao, senior principal analyst at Omdia, told AFP. HBM is used in data centre servers to support other powerful chips such as those made by US titan Nvidia that execute the dizzyingly complex calculations of AI systems. But when it comes to conventional RAM, and a type for computers called DRAM, "the current supply-constrained market environment" could bring CXMT "late-mover advantages", he said. At a shopping centre in a different part of Hong Kong, customer Henry Wong, an investment banker, said he had chosen to upgrade the RAM in an older laptop instead of buying a new one with even better specs. "After upgrading the memory, I found it ran really smoothly, and I stopped wanting to buy a new computer," he told AFP. 'Bubble': Automakers say they are facing rising costs for in-vehicle computer systems, which could also soon push up the price of new vehicles. In Tokyo's tech hub of Akihabara, Charles Brousse, a 30-year-old graphic designer and custom PC builder from Belgium, said prices for RAM, graphics cards and motherboards have hit "ridiculous levels". For his "PC & Chill" service, Brousse does not buy parts to pre-build machines as it is too expensive but he requires clients to purchase their own that he assembles. The chip shortage is pushing people to buy cheaper laptops than desktops, which can last up to a decade, said Brousse, in Tokyo on his honeymoon. "I'm not sure that's a good thing; people end up buying products with shorter lifespans, which fuels a cycle of consumption." Brousse added that the fact it is driven by the "speculative bubble" of AI is also frustrating, "because I'm a graphic designer by trade, so AI has a real impact on my profession."

Chip shortage is back: prices are climbing and it could last through 2027

AI data centers are soaking up memory and chipmaking capacity Demand from advanced data centers is driving chip prices up again right now. It's soaking up memory supply and manufacturing capacity, leaving fewer parts for mainstream electronics and older industrial systems, and turning what might have looked temporary into a structural shortage that analysts now think could last through 2027, maybe longer. You can already see it in the numbers: RAM that once sold for about $100 is moving toward $300, and the median laptop price is rising from roughly $800 to $1,600. Chipmakers are chasing the fatter margins in high-bandwidth memory, or HBM, and server accelerators, not the older chips that still run plenty of the gadgets and business systems people depend on. So even if your phone, laptop, router, or appliance doesn't use the newest parts, you can still feel the squeeze through tighter supply, longer lead times, and higher costs. Apple and Microsoft have already raised some prices. If you're planning to buy laptops, PCs, gaming hardware, cars, factory systems, medical devices, retail tech, or telecom equipment, keep an eye on this. Analysts now see a structural shortage tied to long-term spending on data centers and advanced computing, and they think it could stretch through 2027 or beyond. Governments are trying to respond through the U.S. CHIPS and Science Act, the European Union Chips Act, and new efforts in Brazil, Argentina, and parts of Africa that cover design, assembly, testing, packaging, silicon photonics, advanced memory, and new fabs. Still, don't expect prices to fall overnight.