AI chip shortage drives sharp rise in tech device prices
TLE Desk: Consumers are facing steep price increases for laptops, tablets and gaming consoles as global technology firms blame an artificial intelligence-driven shortage of memory chips for soaring production costs.
Major manufacturers including Apple, Microsoft, Nintendo and Valve have all announced significant price increases in recent months, ending the long-standing trend of older consumer electronics becoming cheaper over time.
Apple this week raised prices of several MacBook and iPad models by nearly 20%, citing an “unprecedented challenge” in the memory chip market. Microsoft also announced another increase for its five-year-old Xbox Series S and Series X consoles, with prices rising by at least $100 from August, marking the company’s third price hike in just over a year.
The increases mean some Xbox consoles will cost between 30% and 40% more than they did a year ago, prompting criticism from gamers frustrated by the escalating costs.
Industry analysts say the surge is being fuelled by the rapid expansion of AI infrastructure. Technology companies are investing hundreds of billions of dollars in massive data centres equipped with high-performance servers that require vast quantities of memory chips, intensifying competition for limited supplies.
The shortage has particularly affected dynamic random access memory (DRAM) and NAND flash memory, both essential components in smartphones, laptops, gaming consoles and AI servers.
According to Counterpoint Research, the price of 32GB DDR5 memory modules for personal computers climbed from around $94 in late 2025 to $127 by the end of that year before surging to $282 during the first quarter of 2026 — an increase of more than 120%.
Analysts say AI companies are securing long-term supply contracts and paying premium prices, encouraging manufacturers to prioritise enterprise customers over consumer electronics makers.
“The MacBook on consumers’ desks is now competing for the same DRAM as the data centres powering ChatGPT — and is losing,” said James Bull, senior technology analyst at RSM UK.
Counterpoint Research described the current memory shortage as the most disruptive supply-side crisis the smartphone industry has experienced.
Beyond AI demand, analysts say persistent inflation, geopolitical tensions and disruptions to global shipping routes have further increased manufacturing costs.
Sony recently attributed higher PlayStation 5 prices partly to inflationary pressures, while analysts also pointed to higher component prices and uncertainty surrounding shipping through the Strait of Hormuz following regional conflict.
Despite concerns over higher retail prices, memory manufacturers have benefited from booming demand. US chipmaker Micron reported that its quarterly revenue quadrupled, driven largely by sales to AI-related customers.
Industry experts expect tight supplies to persist for up to two years, warning that consumer electronics prices are unlikely to fall in the near future as demand for AI computing infrastructure continues to outpace global chip production.
