AI-driven memory crunch set to reshape electronics market and cost structures, Samsung ready for impact

The global semiconductor memory market is entering one of the most turbulent phases in years, with artificial intelligence (AI) demand reshaping supply, inflating prices and forcing device makers to rethink cost structures. As memory chip shortages ripple across consumer and industrial tech sectors, manufacturers face tougher choices, and consumers may soon feel the squeeze in the form of higher prices on smartphones, laptops, TVs and appliances.

At the heart of the disruption is high-bandwidth memory (HBM), a specialised, high-performance component essential to AI accelerators powering data centres. Soaring demand for HBM is creating a knock-on effect across the entire memory ecosystem, squeezing supply of standard DRAM and other components used in mainstream electronics.

According to industry forecasts, this shift could contribute to price rises of between 5-20% across key consumer electronics categories this year, with smartphone makers in particular preparing for increased bills as core component costs surge, as reported by Business Korea.

Samsung and its peers are feeling the pressure acutely. Samsung’s co-CEO TM Roh has warned that “no company is immune to its impact,” noting that shortages are now affecting not only smartphones but TVs, home appliances and other consumer goods. He added that higher memory prices make some level of product price increases “inevitable,” even for market segments traditionally insulated from sharp fluctuations, according to Wccftech.

This dynamic was echoed in a detailed industry analysis showing that rising AI-induced memory demand has pushed general-purpose DRAM production down priority lists, exacerbating shortages and further inflating prices. As Jeff Clarke, COO of Dell Technologies, observed during a recent earnings call, demand is now outstripping supply across DRAM, NAND flash and even hard drive segments as AI workloads proliferate, reports Korea JoonAng Daily.

Analysts note that memory component costs are rising faster than many manufacturers anticipated. Memory now accounts for more than 20% of laptop production costs, up sharply from previous years, and smartphone memory content is also climbing – trends that threaten to erode margins or force price adjustments across entire product lines.

The situation has broader implications for consumer markets. Reports suggest that global smartphone shipments could contract due to price pressures as manufacturers pass on higher memory costs, and that PC and laptop prices are already seeing upward adjustments from major vendors. Industry insiders caution that the imbalance between explosive AI demand and limited supply capacity could continue for years, potentially into 2027 and beyond, as production capacity struggles to catch up.

Memory shortages aren’t just a short-term glitch, but part of a structural realignment in the semiconductor industry, with suppliers prioritising high-value AI applications over commodity products. That shift has created a fierce competition for limited wafer and fab resources, with major players accelerating investments and recalibrating production strategies.

For the broader electronics ecosystem, the message is clear: the era of cheap or stable device prices may be over, supplanted by an AI-driven memory cycle that lifts costs, tightens supply and challenges long-standing assumptions about how consumer and industrial tech markets function.

-- Astute, UK.