Experts warn that the consequences of this pressure will increasingly be felt by end buyers, according to a press release.
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“AI chips and smartphones use different types of memory, but they are produced by the same factories and the same three main companies. In other words, it’s the same ‘kitchen workshop,’ the same production furnace – just different products. AI systems require about three times more production capacity per gigabyte of memory than regular DRAM memory. Currently, about 35-40% of global DRAM production capacity is allocated specifically to the AI market,” says Giedrius Senkus, Director of Procurement and Products for Wholesale Clients at Bitė Lietuva.
Manufacturers’ priority – AI
The biggest players in the technology market – Nvidia, Amazon, Microsoft, Google, Meta, and others – order AI components in huge quantities. Memory manufacturers are accordingly directing more and more capacity to the more profitable AI market. As a result, electronics manufacturers face a shortage of components, which leads to rising device prices.
“After a very rapid price increase in the first half of the year, memory components will continue to become more expensive in the third quarter of this year, forecasts the technology market research company TrendForce. DRAM memory contract prices are expected to rise by about 15–20% more. And this does not mean that the market situation is already normalizing – supply remains tight,” says G. Senkus.
Memory components now account for about 23% of the total cost of computer assembly, whereas previously this share was about 16%. This is already too large a cost share for manufacturers to ‘hide’ it in the final product price. The research company Gartner predicts that due to the rising cost of memory components, personal computer prices may increase by about 17% this year, and smartphones by about 13%.
In June, Apple announced a slight price increase for some MacBook and iPad models. The decision was driven by sharply increased prices of memory and storage components. The company did not raise iPhone prices at all, absorbing the record chip price increase itself.
The AI boom is also affecting another smart manufacturing giant – Samsung. The company, which is also one of the largest memory chip manufacturers in the world, acknowledged in its latest financial report that rapidly rising memory prices are increasing the production costs of its own mobile phones.
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Price changes – also in Lithuania
Lithuanian buyers felt the price changes a little later than the global market, notes Paulius Lingys, CEO of the electronics retail network Elesen.
“Manufacturers and retailers could still trade with previously accumulated stocks for some time, so the increase in component prices was not immediately reflected in the final device prices. However, today new production devices with higher costs are arriving on the market,” says P. Lingys.
The expert is convinced that the situation will not change quickly.
“Memory chip production is one of the most complex processes in the electronics industry. New production capacities do not appear within a few months, and the demand for AI infrastructure continues to grow rapidly. Therefore, there is no reason to expect a sudden drop in component prices in the near future,” notes the head of Elesen.
Is it worth waiting?
This topic is especially relevant as September approaches, when demand for computers, tablets, and phones traditionally increases. Market forecasts show that the supply of memory chips will remain tight not only this year but also in 2027, and significant market normalization can be expected only later.
“If you plan to purchase a phone, laptop, RAM, or SSD storage in the near future, you should not wait for prices to drop. Memory chips are forecasted to become more expensive throughout 2026, supply will remain tight in 2027, and significant market normalization is expected only in 2028–2029. Even then, prices may remain 30–50% higher than before the current price surge. Therefore, if you need a new device within the next one or two years, it is economically more beneficial to buy it sooner rather than later,” says G. Senkus, one of the leaders of the digital services company Bitė.
When choosing a new device, it is worth looking not only at its price but also at how long it will remain relevant. Newer phones and computers better utilize 5G connectivity, support the latest AI features, receive security updates longer, thus ensuring longer-term performance.
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