Computer memory chips are disappearing from global markets, pushing tech companies into fierce competition for whatever supplies remain as AI technology consumes growing quantities of these components, reported Reuters.
What's happening?
Memory chip costs have doubled or more since February across multiple product types. Japanese retailers limit customer purchases of hard drives, while Chinese phone companies notify buyers that prices will climb.
Tech leaders including Microsoft, Google, and ByteDance are working urgently to secure commitments from chip producers Micron, Samsung, and SK Hynix. Supply problems span from simple flash memory in phones through advanced chips that power AI computing centers.
Distributor stockpiles dropped steeply.
In October, sellers maintained just two to four weeks' worth of product compared to more than three months of buffer stock at the close of 2024.
Industry analysts predict shortages lasting into late 2027, according to SK Hynix.
"These days, we're receiving requests for memory supplies from so many companies that we're worried about how we'll be able to handle all of them," said Chey Tae-won, chairman of SK Hynix parent SK Group, at an industry forum last month.
Why is the memory chip shortage concerning?
Supply constraints threaten to slow artificial intelligence progress while postponing digital infrastructure investments worth hundreds of billions. Rising electronics prices could also worsen inflation.
AI presents environmental paradoxes. The technology enables better management of clean energy systems and faster development of climate solutions. Yet AI computing facilities consume enormous quantities of electricity and water, produce considerable electronic waste, and require manufacturing methods that release carbon into the atmosphere.
Chipmakers redirected their production lines toward AI components, abandoning older memory varieties that go into everyday electronics. This shift created tight supplies for phones, computers, and household devices precisely when consumer interest grew.
TCD Picks » Upway Spotlight
💡Upway makes it easy to find discounts of up to 60% on premium e-bike brands
|
Should America invest more in EV battery tech?
Click your choice to see results and speak your mind. |
Absolutely 👍 What's being done about the memory chip shortage?
Manufacturers are adjusting their strategies. Samsung planned to discontinue certain older chip models but chose to maintain that production. Competitors are building additional manufacturing capability.
Companies like Winbond have committed large budget increases for production expansion.
"Many customers have been coming to us saying, 'I really need your help,' and one even asked for a six-year long-term agreement," said Winbond President Pei-Ming Chen.
"Everyone is begging for supply," one provider added.
Those wanting to reduce technology's environmental burden should keep existing devices longer before replacing them. Extending device life cuts electronic waste and reduces demand for resource-intensive chipmaking.
💰Get TCD's free newsletters for easy tips to save more, waste less, and make smarter choices — and earn up to $5,000 toward clean upgrades in TCD's exclusive Rewards Club.
Cool Picks
