Tech enthusiasts and industry analysts are sounding the alarm about RAMageddon, a shortage of random access memory chips crucial for running many consumer electronics. Though the future implications of the mass integration of generative AI have had much of the industry worried, the immediate impact of AI’s excessive memory needs is being felt worldwide.
Insatiable high-margin demand
The memory chip shortage is “beginning to hammer profits, derail corporate plans and inflate price tags” on everything from “laptops and smartphones to automobiles and data centers,” said Bloomberg. Major technology companies have hinted that going forward, the shortage of DRAM, or dynamic random access memory, the “fundamental building block of almost all technology,” will constrain production.
The global RAM market is “experiencing a severe price crisis,” with the cost of memory chips “surging by as much as 80-90% in recent months,” said CNN. RAMageddon has been driven by the “insatiable, high-margin demand for AI data center infrastructure,” leading manufacturers to shift “production capacity away from consumer products.” This has led to the shortage “expected to last well into 2026 and potentially up to 2028,” analysts said to the outlet.
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RAMageddon is “only getting worse,” and there is “no immediate end in sight,” said The Verge. Everything that has a computer inside depends on RAM, and “almost everything has a computer in it now: farm tractors, hospital equipment, your TV set-top box.” Most of the global supply of RAM comes from just “three companies that are happily prioritizing the AI gold rush over everything else.”
Outside of consumer products, the shortage is also “causing problems for resource-constrained laboratories that already faced barriers to accessing powerful computing tools,” said Nature. The shortage is “pushing researchers to develop more efficient algorithms and hardware, to reduce the amount of memory needed.” Scientific research “increasingly relies on large-scale computing infrastructure,” Matteo Rinaldi, the director of the Institute for NanoSystems Innovation at Northeastern University, said to Nature. Many of these workloads “require substantial memory capacity.”
‘Bigger than anything we have faced before’
The tech industry may be reeling because of the shortage, but an easy fix is not imminent. “There’s no relief until 2028,” said Intel CEO Lip-Bu Tan in early February, after speaking to two of the big three memory companies. Micron, SK Hynix and Samsung, which control about 95% of the global DRAM supply, are “making enough money to increase memory production.” Still, it will take time to build the new memory fabrication plants they promised, The Verge said. The companies also see it “as more profitable and less risky to build out slowly” instead of “rushing to meet demand.”
Micron’s memory-fabricating facility in Idaho won’t open until mid-2027, and “you’re not really gonna see real output” until 2028, the company’s vice president of marketing, mobile and client business unit, Christopher Moore, said to Wccftech. SK Hynix predicted the shortage would last through late 2027.
We stand at the “cusp of something that is bigger than anything we’ve faced before,” Tim Archer, the chief executive officer of chip equipment supplier Lam Research Corp., said at a conference in South Korea, per Bloomberg. What lies ahead “between now and the end of this decade” will “overwhelm all other sources of demand.”
With RAMageddon, it is “wiser to hold off doing business today,” as prices are “almost certain to be higher tomorrow,” Suh Young-hwan, who runs three DIY PC shops in Seoul, said to Bloomberg. “Unless Steve Jobs rises from the dead to declare that AI is nothing but a bubble, this trend is likely to persist for some time.”
The ongoing memory crisis is making it “hard for tech enthusiasts and the general population not to feel more than a little deflated,” said Tom’s Guide (a sister site of The Week). We are “marching towards lining the pockets of a small few” while “giving up environmental and financial stability.” It is “easy to feel jaded,” but this kind of crisis “feels a little unprecedented.”
