How and When the Memory Chip Shortage Will End
TL;DR
If it feels these days as if everything in technology is about AI, that’s because it is. And nowhere is that more true than in the market for computer memory. Demand, and profitability, for the type of DRAM used to feed GPUs and other accelerators in AI data centers is so huge that it’s diverting away supply of memory for other uses and causing prices to skyrocket. According to Counterpoint Research, DRAM prices have risen 80-90 precent so far this quarter. The largest AI hardware companies say they have secured their chips out as far as 2028, but that leaves everybody else—makers of PCs, consumer gizmos, and everything else that needs to temporarily store a billion bits—scrambling to deal with scarce supply and inflated prices. How did the electronics industry get into this mess, and more importantly, how will it get out? IEEE Spectrum asked economists and memory experts to explain. The.
Nauti's Take
The memory chip shortage is a classic case of AI-driven demand outstripping supply. As DRAM prices skyrocket, makers of non-AI tech are left scrambling.
With major AI players locking in supplies till 2028, relief seems distant. The industry's scramble to boost production will take time, and prices won't drop overnight.
Expect a prolonged period of constrained supply and high prices.
Summary
If it feels these days as if everything in technology is about AI, that’s because it is. And nowhere is that more true than in the market for computer memory.
Demand, and profitability, for the type of DRAM used to feed GPUs and other accelerators in AI data centers is so huge that it’s diverting away supply of memory for other uses and causing prices to skyrocket. According to Counterpoint Research, DRAM prices have risen 80-90 precent so far this quarter.
The largest AI hardware companies say they have secured their chips out as far as 2028, but that leaves everybody else—makers of PCs, consumer gizmos, and everything else that needs to temporarily store a billion bits—scrambling to deal with scarce supply and inflated prices. How did the electronics industry get into this mess, and more importantly, how will it get out?
IEEE Spectrum asked economists and memory experts to explain. The
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