AI memory crunch pushes up tech prices, squeezing smaller device makers
Cue Writer
A global squeeze in memory chips is raising costs across the electronics industry, with artificial intelligence demand pushing some components sharply higher and forcing major device makers to adjust prices, according to a CNBC report published Saturday.
The pressure is being felt from the largest technology companies to smaller manufacturers that have less leverage with suppliers. CNBC reported that Apple and Microsoft both announced price increases this week, while smaller device makers are weighing whether to delay products, reduce specifications or pass higher costs on to customers.
Memory chips such as DRAM are used in phones, tablets, computers, game consoles, networking equipment and other devices. Demand has accelerated as AI data centers require large amounts of advanced memory to support processors and systems built by companies such as Nvidia. That has tightened supply for consumer-electronics makers and raised input costs.
One example cited by CNBC was Mono Technologies, a small router company whose co-founder said the cost of 8 gigabytes of Micron DRAM rose from about $35 during product development to about $300. The company is considering whether to raise the price of its next production run or redesign the product with less memory.
The impact is not limited to startups. CNBC reported that Microsoft increased the price of the Xbox Series S by $100 to about $500 after saying console storage and memory costs had risen more than 2.5 times. Apple also raised prices on a range of iPads and Macs, citing an unusually fast rise in component costs.
Chipmaker Micron has been one of the beneficiaries of the shortage. CNBC reported that Micron’s latest quarterly revenue more than quadrupled, while its gross margin more than doubled to nearly 85%. The company also said average selling prices for dynamic RAM rose more than 260% from a year earlier.
For consumers and small businesses in the Virgin Islands and elsewhere, the supply crunch could show up as higher prices for laptops, tablets, phones, routers, game systems and other imported electronics. Businesses that rely on communications equipment, security systems or upgraded computers may also face longer lead times or tighter budgets if component costs remain elevated.
The shortage also highlights how the AI investment boom is reshaping more than just stock-market valuations. As money flows into data centers and high-end chips, the same supply chain is influencing everyday technology costs, corporate profit margins and purchasing decisions for households and businesses.
Investors are likely to keep watching memory prices, semiconductor earnings and pricing updates from major device makers for signs of whether the crunch is easing or spreading further through the consumer electronics market.
Source: CNBC