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Smartphones and PCs may soon cost up to 20% more as AI fuels memory shortage

With AI companies booking memory supply until at least 2027, smartphone and PC makers are warning that prices could rise by as much as 20 per cent in the coming months.

2 min readNew DelhiUpdated: Jan 5, 2026 09:06 AM IST

The AI-driven memory chip crunch could lead to more smartphones launching with lower RAM configurations. (Express Photo)

The rapid expansion of artificial intelligence is already driving up the cost of key components like RAM and SSDs, with prices doubling and even tripling in the last few months. Now, the ripple effects of the memory crunch are beginning to hit the broader consumer electronics market like smartphones and PCs.

Memory giants Samsung Electronics and SK Hynix, who account for more than 70 per cent of the market, have said their planned production capacity is fully booked for the year. According to IDC, the unprecedented shortage of memory chips could last until at least 2027, as demand from AI data centres continues to outstrip supply.

The research firm also warned that for consumers, the shortage could mark “the end of an era of cheap, abundant memory and storage,” at least in the medium term.

A new report by the Financial Times now suggests that consumer electronics makers such as Dell, Lenovo, Raspberry Pi, and Xiaomi are warning that the chip shortage could cause a price hike between 5 and 20 per cent.

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During an earnings call in November last year, Dell COO Jeff Clarke said that the company had never seen “costs move at this rate,” while Lenovo – the world’s largest PC maket started stockpiling memory chips and other key components to protect itself against future shortages.

According to Peter Lee, an analyst at Citigroup, the AI data centre demand is much more than anticipated and that “supply will remain tight until 2027, with no additional capacity expected.”

Recently, Asus announced that it would start raising prices on several products starting January 5, while Dell is also reportedly planning to increase prices from $55 to $765 for its high-end memory. However, big tech giants like Apple and Samsung may be more resistant to these hikes as they have long-term supply agreements.

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