RAM: The memory crisis you won’t forget

“RAMageddon” is “coming for everything you care about,” said Sean Hollister in The Verge. Anything with a computer in it—your phone, your car, your thermostat—depends on random-access memory (RAM) to store data or serve as short-term memory, and its price has “tripled, quadrupled, even sextupled,” over the last year. Consumer-electronics margins are already razor-thin, so get ready for higher prices or delayed product launches. Every major laptop maker is “planning price hikes of 10%, 20%, or even 30%,” with Dell already upping prices on its notebook computers by $55 or more. Nintendo may raise the Switch 2’s price, Sony could delay its next PlayStation, and supplies are already low for Valve’s Steam Deck handheld gaming console. TV and even car production may suffer, and “if you’re used to buying $500 phones, they might easily cost
$600 or more.”

The memory shortage is another example of how consumers are bearing the burden “for AI giants’ rush to build out their ambitions,” said Dave Lee in Bloomberg. The three semiconductor companies “collectively responsible for more than 90% of global chip production”—SK Hynix, Micron, and Samsung—are channeling supply into Big Tech’s AI drive. Meta, Microsoft, Amazon, and Alphabet are investing $650 billion in data centers that need vast amounts of expensive chips. This “reallocation of resources” is “crippling the tech supply chain for everyone except the largest and richest AI hyperscalers.”

Besides the chipmakers, the only other winners from this might be investors, said Michael Grothaus in Fast Company. Memory chipmakers have “seen their share prices skyrocket over the last year.” The stock of SanDisk, which makes a middle-priced memory option, rose 1,200% in six months. Micron, along with flash-storage companies Western Digital and Seagate Technology, were some of the best-performing stocks in the S&P 500 last year. “If you had put all your savings into a few pallets of computer memory chips a year ago, you’d have at least doubled your money by now,” said Christopher Mims in The Wall Street Journal. The “once-affordable microchip” is now “one of the world’s fastest-appreciating assets,” and analysts predict these sky-high valuations will stay that way “for a year or two.”

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Manufacturers are trying to bring supply in line with demand, said Samuel K. Moore in IEEE Spectrum. Micron is investing $100 billion in several upstate New York facilities, SK Hynix has plans for a $13 billion plant in South Korea and a $4 billion complex in Indiana, and Samsung is building a $17 billion facility in Taylor, Texas. But “will prices come down once some of these new plants come on line? Don’t bet on it.” Micron CEO Sanjay Mehrotra says demand across the industry will outstrip supply “substantially...for the foreseeable future.”