The AI race is causing a memory chip shortage — and that's bad news for the smartphone and PC industries (www.businessinsider.com)

The increasing demand for memory chips by AI companies is creating a severe shortage that is negatively impacting the smartphone and PC industries. As big players like OpenAI, Meta, and Google invest heavily in AI infrastructure, they're securing substantial quantities of DRAM and NAND chips—crucial for running advanced language models—which in turn is straining supply levels and pushing prices up. According to IDC, this shift signifies a departure from an era of affordable memory, with forecasts predicting a contraction of up to 5.2% in the smartphone market and as much as an 8.9% decrease for PCs by 2026. Manufacturers like Samsung, SK Hynix, and Micron, which dominate memory production, are now prioritizing orders from AI firms over traditional consumer electronics, leading to tighter supply and increased costs for device manufacturers. This dynamic is causing price hikes for smartphones and laptops, with IDC anticipating rises of up to 8% in the most pessimistic scenarios. Companies like Dell and ASUS have already begun raising their prices in response to these supply chain pressures. Ultimately, while AI firms benefit from heightened demand, consumers and device manufacturers are left navigating a challenging economic landscape marked by skyrocketing prices and diminished supplies.