AI server demand drives memory chip prices up fivefold in a year

Memory chip prices have climbed approximately fivefold over the past year as major manufacturers redirect production capacity toward artificial intelligence infrastructure, according to data from Counterpoint Research reported by Asia Today.

Samsung Electronics, SK hynix and Micron have prioritized manufacturing high-bandwidth memory and server DRAM to meet explosive demand from AI data center construction. That strategic shift has tightened the supply of conventional memory chips used in consumer electronics, creating ripple effects across global device markets.

Consumer electronics absorb the shock

Smartphone buyers are experiencing the most visible impact. The average retail price of smartphones sold worldwide in 2026 stands about 15 percent higher than the previous year, according to Counterpoint Research. Newly launched models carry price tags roughly 25 percent above comparable products released a year earlier, with more than 40 percent of all smartphone models undergoing price increases.

Counterpoint found that smartphone memory prices rose approximately 300 percent in the second quarter compared with the same period a year earlier. Memory costs now exceed application processor costs across every smartphone price category—a structural shift in device economics. For budget smartphones with similar specifications, component costs increased about 70 percent year-over-year, with memory accounting for most of that increase.

Laptops and desktop PCs face even greater pressure because they typically contain larger memory configurations. TrendForce estimated that the central processor, DRAM and solid-state drive together represented about 45 percent of the bill of materials for a $900 laptop in the first quarter of 2025. By the third quarter of 2026, that share had climbed to 68 percent.

Manufacturers adjust pricing and specifications

The Financial Times reported that electronics companies including Apple and Microsoft have responded to memory shortages by raising prices or reducing product specifications. South Korean manufacturers have followed suit.

LG Electronics increased prices on certain 2026 Gram laptop models, with some 16-inch configurations rising from 3.14 million won ($2,330) to 3.54 million won ($2,630) as of April—a 13 percent increase. Samsung Electronics raised prices for its Galaxy Book6 lineup by between 175,000 won ($130) and 900,000 won ($669) depending on specifications.

In smartphones, Samsung raised U.S. prices for some Galaxy Z Fold8 and Z Flip8 models unveiled in July by $100 compared with their predecessors. Some manufacturers are reducing storage capacity, simplifying camera configurations and increasing the proportion of 4G models in certain markets. In price-sensitive segments, some producers unable to absorb higher memory costs are reducing shipments altogether.

Why it matters

The memory price surge illustrates how AI infrastructure buildout creates cascading effects beyond the data center. Companies like Samsung face a paradox: their memory divisions benefit from AI-driven demand while their consumer electronics units struggle with higher input costs. The situation could reshape competitive dynamics in budget device markets and test how much cost increase manufacturers can pass to consumers before demand softens. For technology buyers, the era of steadily declining electronics prices appears to have reversed, at least temporarily.

These details were first reported by Asia Today and translated by UPI.