The price of oil fluctuates. It's volatile, geopolitical, and emotional. But right now, a different commodity is quietly running out — and its shortage is reshaping the cost of nearly every device you own.
Memory chips. The humble, unglamorous DRAM inside your laptop, your phone, your car — is at the centre of a supply crisis the industry is calling, without exaggeration, historic.
When AI Came for Everyone's RAM
Data centre demand for DRAM surged to around 50% of global consumption in 2025, up sharply from 32% five years earlier — a seismic reallocation happening almost entirely because of AI infrastructure. Modern AI servers use vast amounts of High-Bandwidth Memory, or HBM, attached to accelerators like GPUs. HBM requires large, costly dies stacked vertically and is far more lucrative for manufacturers than commodity DRAM. As memory companies reallocated wafer capacity from standard DRAM to HBM to serve the AI boom, conventional DRAM production lagged.
The result: a shortage that has spilled far beyond data centres. Demand and profitability for the type of DRAM used to feed GPUs in AI data centres is so huge that it's diverting supply away from other uses and causing prices to skyrocket — leaving makers of PCs, consumer gadgets, and everything else scrambling to deal with scarce supply and inflated prices.
A Structural Break, Not a Supply Blip
Unlike the 2020–2023 global chip shortage, which stemmed primarily from pandemic-related supply chain disruptions, this shortage is driven by a structural reallocation of manufacturing capacity toward high-margin products for AI data centre infrastructure. In other words, chipmakers aren't just failing to meet demand — they're choosing to serve a more lucrative master.
AI servers require far more memory per system than consumer devices, so the AI build-out is pulling a disproportionate share of global capacity as suppliers prioritise orders from hyperscalers building AI servers. That dynamic has left less DRAM available for consumer devices, exacerbating price pressure in a tight market.
The memory market is concentrated in exactly three companies — Samsung, SK Hynix, and Micron — which means there is no spare bench. There are no manufacturers waiting in the wings to step in and seize the void when one of these chipmakers shifts their focus to HBM.
Two CEOs, One Warning
A growing procession of tech industry leaders including Elon Musk and Tim Cook are warning about a global crisis: a shortage of memory chips is beginning to hammer profits, derail corporate plans, and inflate price tags on everything from laptops and smartphones to automobiles and data centres.
Cook said: "Unfortunately, price increases are unavoidable. We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers from the increases, but the situation has become unsustainable."
Musk went further. During Tesla's Q4 earnings call, he said that "memory is an even bigger limiter than AI logic." His proposed solution was blunt: he wrote on X that "the production shortfall relative to demand is insane. MUCH higher production is needed."
India Isn't Watching from the Sidelines
The ripple effects hit India directly. iPhones and MacBooks already cost considerably more in India than in the United States because of import duties and GST. Any rise in Apple's global base prices will be passed straight on to Indian retail prices. While Apple produces part of its iPhone range in India via Foxconn and Tata Electronics, sourcing memory chips continues to be a global supply chain issue, irrespective of where devices are ultimately assembled.
And relief is not imminent. Big tech companies are on track to spend a staggering $650 billion in 2026, up about 80% from last year's record. So even if chipmakers ramp up production, potential relief from the shortage is more than a year away — if not longer.
AI didn't just change the technology industry — it broke the deflation engine that made technology affordable. That's the real story behind your next phone upgrade costing more than you expected.
Sources
- AI Chip Manufacturing Demand Creates Historic Shortage
- RAM Shortage 2025: How AI Demand is Raising DRAM Prices | IntuitionLabs
- How and When the Memory Chip Shortage Will End
- 2025–present global memory supply shortage - Wikipedia
- IDC - Global Memory Shortage Crisis: Market Analysis and the Potential Impact on the Smartphone and PC Markets in 2026
- How AI Forces Are Spurring a Memory Chip Shortage - Z2Data
- AI Boom Driving a Global Memory Chip Shortage, Sending Prices Soaring - Bloomberg
- Elon Musk and Tim Cook issue the same red alert over new crisis in America — and it’s unlike anything they’ve ever seen
- Elon Musk agrees with Tim Cook: The memory shortage is unprecedented - AOL
- Tim Cook Warns Apple Price Hikes Are 'Unavoidable' as AI Drives Global Memory Chip Shortage
- Tim Cook: Unlike Anything in 40 Years. Elon Musk: Biggest Price Jump Ever. AI Broke the Deflation Machine. - FourWeekMBA