Memory Crisis: Why Phones, Computers, and Consoles Are Getting More Expensive – And How Long It Will Last

Apple CEO Tim Cook called it a “once-in-a-century flood” in June, adding that he hadn’t seen anything like it in over forty years in the industry. A few days later, Apple raised the prices of computers and tablets. The CEOs of Xiaomi and Nothing are also warning, the manufacturing cost of PlayStation 6 has reportedly exceeded a thousand dollars, and memory modules for computers have multiplied in price over the year. The common denominator is clear – a memory crisis triggered by artificial intelligence. Let’s look at what’s happening in the market, why it’s happening, and what it means for your next purchase. We’ll return to individual examples in more detail below.

What’s Happening Right Now?

The price increase is not a matter of a single brand or a specific category. Within a few months, prices have risen across the entire market – from cheap phones to laptops and desktop computers, all the way to gaming consoles and graphics cards. According to estimates by the analytical firm Gartner, picked up by industry media, computers are expected to increase in price by approximately 17 percent on average this year, and phones by 13 percent, with both categories projected to sell in smaller numbers than last year.

At the heart of the problem is a single, otherwise inconspicuous component: memory. In a typical phone today, RAM and storage account for roughly 30 to 40 percent of the total component cost, whereas historically it used to be 10 to 15 percent. For the cheapest models, this proportion is even higher.

Why Is Memory Getting So Expensive?

To understand the cause, three acronyms suffice. DRAM is operating memory (what is called RAM in both mobile phones and computers). NAND is flash storage, meaning SSDs and memory in phones. And HBM is a special, very fast memory needed by artificial intelligence chips in data centers.

And it is HBM that is fueling this entire crisis. The artificial intelligence boom has created enormous demand for powerful chips for data centers, which in turn drives demand for HBM memory. This is manufactured by the same factories as regular DRAM – but HBM production is much more capacity-intensive. According to TrendForce analysts, one gigabyte of HBM consumes roughly four times the manufacturing area compared to regular DRAM. Thus, even a relatively small volume of memory for AI takes up a disproportionately large share of production lines.

Furthermore, manufacturers are doing something economically logical: three companies that control virtually the entire global market – Samsung, SK Hynix, and Micron – are shifting capacities towards more expensive memory for data centers, where they have higher margins. This leaves less for regular DRAM and NAND storage, and what is scarce becomes more expensive. The research firm IDC described it as a “zero-sum game”: every manufacturing wafer allocated for AI is a wafer that won’t go to memory for a mid-range phone.

The numbers on which all this rests are truly extraordinary. In the first quarter of this year, contract prices for regular DRAM jumped by 93 to 98 percent within a single quarter, according to TrendForce – for computer memory, even over one hundred percent, which is a record. NAND storage prices grew by tens of percent and were expected to continue rising in the next quarter. IDC and other analysts also agree that this is not a typical cyclical fluctuation, but possibly a more permanent redistribution of manufacturing capacities in favor of artificial intelligence.

From Mobiles to Consoles: Where It’s Already Showing

The most visible sign is Apple. Tim Cook admitted that price increases are inevitable and that the company is trying to protect customers, “but the situation is unsustainable.” Apple subsequently raised the prices of computers and tablets; in the Czech Republic, we reported how even the cheapest MacBook Neo got more expensive. TechInsights analysts also estimate that the next generation of the premium iPhone could approach a starting price of 1,299 dollars (approximately 28,500 Czech crowns) – however, this is an estimate, no official number has been released yet.

The same tune is heard from Android. Xiaomi CEO Lei Jun warned against delaying the purchase of a new phone, and according to company management, the most expensive Chinese flagships could exceed 10,000 yuan (around 32,000 Czech crowns) by the end of the year. Nothing founder Carl Pei also joined the warning, stating that memory now accounts for over half the cost of phone components – more than the processor and display combined. “The era of cheap silicon is over,” he wrote. Counterpoint Research analysts add that manufacturers are already quietly cutting features on some models, such as cameras, to maintain prices.

It is also significantly impacting computers. For example, this set of 32 GB DDR5 memory (2x 16 GB), which cost 2,779 CZK a year ago, is currently selling for 11,690 CZK. SSD drives have not escaped the price increase either; for instance, this one from Samsung cost 4,499 CZK last August and can now be bought for 5,999 CZK.

And finally, gaming consoles. Microsoft announced in June that Xbox consoles will increase in price from August by 100 to 150 dollars (approximately 2,200 to 3,300 Czech crowns) depending on the model, and openly admitted that memory and storage prices have risen by more than 2.5 times and are expected to double again by next autumn. Nintendo increased the price of Switch 2 by 50 dollars. And even though Valve’s Steam Machine is also suffering from price increases, the unannounced PlayStation 6 is attracting the most attention. According to leaks, its manufacturing cost alone has climbed to a thousand dollars, and starting price estimates are heading beyond this threshold.

Consumers Cry, Memory Manufacturers Rejoice

The other side of the coin is less visible but should also be mentioned. While buyers are paying more, memory manufacturers are experiencing their best period in years. Memory stocks jumped by tens of percent in one May week, and SK Hynix and Micron, with their market value, became among the most valuable technology companies in the world.

Specific figures show how advantageous the situation is for manufacturers. Micron has signed long-term contracts with major artificial intelligence customers, fixing high prices until 2030, and its gross margin in the third quarter of this year reached almost 85 percent. Meanwhile, the same companies are facing a recently filed class-action lawsuit in the United States, alleging that they artificially inflated memory prices through coordinated production.

How Long Will the Memory Crisis Last?

Specific answers vary, but they agree on one thing: it won’t be over quickly. Most analysts – from Counterpoint Research to IDC and even chip manufacturers themselves like AMD, Intel, or Micron – place the first significant relief no earlier than the end of 2027, but more likely until 2028. Nvidia CEO Jensen Huang speaks of “a few years,” which could easily mean the end of the decade.

The reason is structural. New factories are being built, but they won’t be fully operational until 2027 and 2028 – and a large part of their future capacity is already pre-contracted to data center operators. Analysts from SemiAnalysis also point out that the current “supercycle” is harder to resolve than previous fluctuations because complex HBM memory cannot be produced as quickly as regular DRAM. For balance, let’s add that not everyone agrees with the bleakest estimates – some commentators question whether price increases in the second half of the year will proceed as rapidly as the toughest predictions claim. However, no one disputes the direction prices have taken.

What to Do as a Buyer?

There is no universal advice, but the situation changes the usual logic of “I’ll wait, it will get cheaper.” If you genuinely need a new phone, computer, or console within a few months, waiting for the next generation carries the risk of a higher price, not a lower one – new models enter a more expensive market, and discount promotions tend to be less generous. If, on the other hand, the purchase is not urgent, it makes sense to assume that it probably won’t be cheaper than today for some time, and accordingly consider an older or refurbished model or simply extending the lifespan of your current device.

Either way, the memory crisis is not a temporary episode that can be simply weathered until the next sale. It is a new framework within which electronics will be purchased for some time – and it pays to account for it.

Do you regularly upgrade your electronics, or are you planning to stick with your current devices longer due to the price increases?

Sources: TrendForce, Counterpoint Research, Gartner, IDC, CNBC, ABC News, The Register, Tom’s Hardware, XDA Developers, Xbox Wire, Nintendo