Azernews.Az

By Alimat Aliyeva

The rapid expansion of artificial-intelligence infrastructure is triggering a global memory chip shortage, as factories prioritize chips for hyperscalers over those used in laptops and smartphones, AzerNEWS reports, citing foreign media.

The shortage is expected to have far-reaching global ramifications. The world’s two largest memory chipmakers, South Korean companies Samsung Electronics and SK Hynix, are posting record sales. New memory chip plants are being announced in countries including Japan, Singapore, and Taiwan, while China, facing U.S. export controls, is racing to catch up in memory technology.

This trend is already pushing up prices for consumer electronics worldwide, threatening the profitability of low-cost smartphones and laptops.

Memory chips, made from silicon wafers, are a critical part of the semiconductor ecosystem. They store data and deliver it to processing units, which perform computations. The two major types are DRAM, which provides short-term memory for active programs, and NAND flash, which stores files for the long term.

AI data centers increasingly rely on an ultrafast memory architecture called high-bandwidth memory (HBM). In HBM, DRAM chips are stacked vertically and placed next to the graphics processing unit, enabling rapid data access that is essential for running large language models and other AI workloads.

As the AI industry orders vast quantities of HBM chips, manufacturers are diverting capacity away from conventional DRAM and NAND chips used in consumer electronics. Prices are rising at historic rates: in the first quarter alone, DRAM prices are expected to rise by 90%–95%, while NAND flash prices could increase by 55%–60%, according to market research firm TrendForce.

SK Hynix, Samsung, and U.S. company Micron account for over 90% of global memory chip production. All three are expanding in Asia, with Micron also planning facilities in the U.S., Japan, Singapore, and Taiwan, while Samsung and SK Hynix increase capacity in South Korea. The rise of AI has shifted the spotlight to hardware suppliers, with SK Hynix and Samsung recently surpassing the combined market capitalization of Chinese tech giants Alibaba and Tencent for the first time.

China imports most of its memory chips but is working toward self-sufficiency in AI hardware. The U.S. imposed restrictions in 2024 on China’s access to HBM chips to limit its AI advancements. China’s ChangXin Memory Technologies is catching up to Korean rivals in producing HBM chips, though it remains several years behind technologically. By 2026, it is projected to account for nearly 15% of global DRAM production, according to research firm SemiAnalysis. Meanwhile, Yangtze Memory Technologies, China’s leading NAND flash producer, is expanding its fabrication plants and plans to enter the AI-focused DRAM market.

It will take years for chipmakers to build enough production lines to satisfy AI-driven demand. Until then, the memory crunch is expected to continue pushing up prices for computers, smartphones, tablets, and even cars. Rising memory costs may make low-end devices economically unviable, and some budget smartphones could be pulled from the market altogether. Counterpoint Research forecasts that global smartphone shipments will fall by 2.1% in 2026, with Chinese brands like Honor, Vivo, and Oppo, which have large portfolios of budget models, expected to be hit hardest.

Some analysts predict that the memory shortage could accelerate innovation in AI-optimized chips and drive companies to develop alternative memory technologies, such as computational memory or advanced 3D-stacked architectures, potentially reshaping the future of both consumer electronics and AI hardware.