The relentless expansion of artificial intelligence is quietly reshaping the economics of everyday electronics, driving up the cost of the memory chips that power laptops, phones and games consoles to levels not seen in years. What the tech industry has labelled “RAMageddon” is not the result of a raw-material shortage or a diplomatic spat, but the direct consequence of AI’s insatiable appetite for high-performance memory — an appetite that has consumed not only the world’s current supply of chips but also years of future production capacity.
At the heart of the shortage is the explosion of data centres built to train and run large language models and generative AI. These server farms are packed with vast quantities of High Bandwidth Memory (HBM), a specialised type of DRAM that allows AI processors to move data at unprecedented speeds. The demand for HBM has been so intense that the world’s three dominant memory manufacturers — Samsung, SK Hynix and Micron — have shifted a large portion of their production lines away from the standard DRAM and NAND flash chips used in consumer devices and towards these higher-margin AI components. Micron, for instance, has exited its Crucial consumer business entirely to focus on strategic customers in faster-growing AI segments. The result: a dramatic squeeze on the supply of the memory chips that go into everything from a £300 smartphone to a £2,000 gaming laptop.
The knock-on effects are already visible on shop floors and in product catalogues. Major manufacturers including Microsoft, Samsung and Dell have begun raising prices and quietly phasing out their cheapest models. Apple added £100 to the starting price of its MacBook Air while doubling its minimum storage — a move that effectively raises the floor for anyone buying a new machine. Microsoft phased out lower-end Surface models while adding between £170 and £200 to the starting price of its remaining range. On the gaming front, Sony raised the price of the PlayStation 5 by £90 on 2 April and is reportedly considering delaying its successor; Microsoft added £20 to £50 to the cost of an Xbox last year; and Meta increased the price of its Quest 3S VR headset by £30 on 19 April. Samsung has added £50 to certain smartphone models including the 512GB S25 Edge, and multiple other handset makers have warned of further price rises this year.
Industry analysts warn the worst may be yet to come. TrendForce, the market research firm, estimates that mainstream laptops typically costing around $900 (£667) could see price increases of as much as 40% in 2026. IDC, another research firm, forecasts average PC prices to rise by 8–15% this year alone. On smartphones, the cost of the memory chips inside them has nearly tripled over the past year, according to industry estimates, which could push UK phone prices up by roughly 8% in 2026. The pressure is especially acute on budget devices, where memory accounts for about 30% of the cost of a sub-£400 smartphone and 23% of an entry-level laptop. Ranjit Atwal, senior director analyst at Gartner, has said those margins are so thin that “the sub-$500 (£370) entry-level PC segment will disappear by 2028.” The same dynamic applies to phones: finding a new handset or laptop under £400 is becoming significantly harder.
How AI’s memory hunger created the shortage
The chain of cause and effect is straightforward but its consequences are far-reaching. AI models, particularly large language models and generative AI systems, require enormous amounts of memory not only for training but for real-time inference. To meet that demand, the world’s biggest technology companies — the ones building the data centres that underpin services such as ChatGPT, Google Gemini and Microsoft Copilot — have signed multi-year agreements with memory chip suppliers, locking up large portions of the available production capacity. Some estimates suggest that as little as 60% of the demand for memory chips will be met over the next few years, leaving the rest of the market to scramble for what remains.
That scramble has affected more than just standard DRAM. The supply of NAND flash storage chips used in solid-state drives (SSDs) has been constrained as manufacturers repurpose production lines towards AI memory. The availability of lower-end processors has also taken a hit, as foundries switch to making the high-end chips that power AI accelerators. The effect is a cascade: from server farms to graphics cards to the humble laptop motherboard, every link in the electronics supply chain is feeling the pressure. Some manufacturers stockpiled components when they saw the shortage coming, but those buffers are running low.
The three main memory makers — Samsung, SK Hynix and Micron — are building additional fabrication plants to increase capacity, but these facilities will not come online until 2027 at the earliest. SK Hynix has publicly stated that it expects the current shortage to last until 2030. In the meantime, the price pressure on memory supplies shows no sign of easing.
What it means for consumers — and what to do about it
For anyone planning to buy a new laptop, phone or console in the coming months, the advice from analysts is consistent: act sooner rather than later. Prices have already started rising and are expected to climb further as the year goes on. Older models that were manufactured before the latest price increases took hold may still be available, though retailers have been known to mark up remaining stock artificially, so buyers should compare prices carefully.
Refurbished electronics offer a cheaper and more sustainable alternative. While their residual values may also rise, the increases are unlikely to match those of brand-new devices. Repairing an existing device is another option, especially as regulatory pressure builds for manufacturers to design for repairability and provide spare parts for longer periods. The UK’s growing “right to repair” movement, combined with consumer demand for longer-lasting products, is pushing some brands to offer modular designs and extended software support — Google’s Pixel range, for instance, now guarantees seven years of updates, making a higher upfront cost more justifiable over time.
The broader market is already shifting towards what analysts call a “fewer but better” mindset. UK consumers, faced with rising costs, are increasingly choosing high-quality, long-lasting devices over frequent replacements. This trend is likely to accelerate as the memory shortage makes budget options scarcer and more expensive. At the same time, there are concerns that electronics manufactured during the shortage may suffer from higher failure rates and shorter lifespans, as component downgrades and design trade-offs become more common. That makes the “wait and see” approach riskier than it might appear.
Beyond memory, raw material costs are also climbing. The price of copper, a key component in circuit boards and wiring, has risen sharply in 2026, adding to the overall bill for manufacturers. The combination of AI-driven memory demand, constrained production capacity and rising input costs means the cheap laptop, the bargain phone and the affordable console are becoming relics of a previous era — one that is not coming back anytime soon.
