AI memory shortage leads to unprecedented price surge

• Producing one bit of HBM memory for AI chips requires forgoing three bits of conventional memory, as AI servers like Nvidia's NVL72 need up to 288GB of HBM per GPU versus 8-12GB in typical smartphones
• Memory now accounts for about 20% of laptop hardware costs, up from 10-18% in early 2025, with companies like Dell warning they cannot avoid passing price increases to customers
• Micron reports being 'sold out for 2026' and is building new factories in Idaho (2027-2028) and New York (2030) to address the supply gap, while its stock has surged 247% over the past year

AI Memory Shortage Drives Unprecedented Price Surge

Key Developments:

A severe shortage of computer memory (RAM) is driving unprecedented price increases as AI chip demand overwhelms global supply. TrendForce projects DRAM prices will surge 50-55% in Q1 2026 versus Q4 2025—an analyst called this increase "unprecedented."

Major Players:

The three dominant memory suppliers—Micron, SK Hynix, and Samsung Electronics—control nearly the entire RAM market and are benefiting significantly. Micron's stock has surged 247% over the past year, with net income quadrupling in the most recent quarter. SK Hynix expects Q4 operating profit to nearly triple.

Supply-Demand Imbalance:

AI chips from Nvidia, AMD, and Google require massive amounts of specialized high-bandwidth memory (HBM). Nvidia's new Rubin GPU uses up to 288GB of HBM4 memory per chip—vastly more than typical consumer devices using 8-12GB. Micron's business chief stated demand has "far outpaced our ability to supply" and the industry's overall capacity.

The production economics are stark: manufacturing one bit of HBM requires foregoing three bits of conventional memory, creating a "three-to-one basis" trade-off that leaves consumer markets undersupplied.

Market Impact:

Consumer RAM prices have exploded—one tech executive noted that $300 worth of memory purchased months ago now costs approximately $3,000. Memory now represents 20% of laptop hardware costs, up from 10-18% in early 2025.

Dell warned the shortage will likely drive up retail prices for consumer devices. Apple downplayed impacts, while Micron discontinued its consumer PC builder business to prioritize AI chips.

Outlook:

Micron is "sold out for 2026" and building new facilities in Idaho (opening 2027-2028) and New York (2030), though current capacity can only meet two-thirds of medium-term customer requirements.