Memory chip shortage is driving consumer goods prices higher

Memory chip prices have climbed relentlessly in recent months, splitting the stock market into clear winners and losers. A Bloomberg index of global consumer electronics makers has fallen 10% since late September. 

In contrast, a basket of memory producers, including Samsung Electronics Co., has surged roughly 160% in the same period. The company said it has begun shipping its latest HBM4 memory chips to unnamed customers, stepping up efforts to catch rival SK Hynix in supplying AI hardware for Nvidia accelerators.

Spot DRAM prices alone have skyrocketed more than 600%, as supply tightens and AI demand accelerates.

Amid the boom, Samsung, SK Hynix, and Micron are struggling to keep up with surging demand from consumer electronics and AI data centers.

This has driven prices of personal electronics higher, with PC makers among those hit the hardest.

The shortage reflects bad timing, analysts say.

It began during the pandemic, when Amazon, Google, and Microsoft rushed to buy up memory to power cloud demand.

That hoarding pushed prices up, helping chipmakers. But when buying slowed in 2022–23 amid return-to-office mandates and inflation, some producers slashed output by as much as 50% to prop up prices.

AI boom fuels a supercycle
Massive AI infrastructure spending, led by firms like Amazon.com Inc., has shifted chip capacity toward high-bandwidth memory. 

As the rules of supply and demand go, companies need to increase production to meet market pressure, but doing so is expensive. Companies will have to find innovative ways to lower the prices of consumer tech.