A severe worldwide shortage of memory chips is forcing artificial intelligence developers, cloud providers and consumer-electronics manufacturers into fierce competition for rapidly shrinking supplies, according to a detailed investigation by Reuters. The crunch has sent prices soaring for everything from basic storage components to advanced high-bandwidth memory (HBM), raising alarms across industries that depend on stable and affordable semiconductor availability.
Reuters found that the shortage has become visible at the retail level, with Japanese electronics shops limiting hard-disk purchases and Chinese smartphone makers warning of looming price hikes. Tech giants including Microsoft, Google and ByteDance are urgently negotiating with leading chipmakers such as Micron, Samsung Electronics and SK Hynix in an attempt to secure allocations. Demand spans nearly every category of memory, and prices in several segments have more than doubled since February, according to TrendForce data cited by Reuters.
Experts interviewed by Reuters warn the shortage could delay AI-related productivity gains and slow the rollout of digital infrastructure worth hundreds of billions of dollars. Some economists caution that sharply rising chip costs could add inflationary pressure at a time when many countries are already grappling with higher consumer prices and a shifting tariff landscape. Sanchit Vir Gogia, CEO of Greyhound Research, told Reuters that the situation has escalated from a supply-chain problem to a macroeconomic risk as AI development collides with limited manufacturing capacity.
The Reuters investigation, based on interviews with nearly 40 industry sources, shows that the push to manufacture increasingly advanced chips for companies like Nvidia, Google, Microsoft and Alibaba has outpaced global production capabilities. Chipmakers shifted their focus toward HBM to meet AI demand, leaving a shortfall in traditional memory products used in smartphones, PCs and data-center servers. The pivot was further complicated by unexpectedly strong recovery in electronics sales and replacement cycles. Average DRAM inventory levels fell sharply this year, and some suppliers now hold only two to four weeks’ worth of stock.
Reuters reports that memory-chip producers are cautious about expanding too quickly, given the risk of overbuilding if demand eventually levels off. Samsung and SK Hynix have announced new factories, but most new capacity for conventional memory will not come online until 2027 or later. SK Hynix has already told analysts the shortage could extend through late 2027, and its parent company chairman, Chey Tae-won, said demand is so intense that many customers fear being unable to continue operations without assured supply.
Competition for available memory has intensified. Reuters reports that OpenAI signed initial agreements with Samsung and SK Hynix for its Stargate project, which could require up to 900,000 wafers per month by 2029 — roughly double current global HBM output. Meanwhile, Google, Amazon, Microsoft and Meta have pressed Micron for open-ended commitments, seeking as much material as the company can produce regardless of cost. Chinese firms including Alibaba, ByteDance and Tencent have also sent executives to South Korea to lobby for priority allocations. One source told Reuters: “Everyone is begging for supply.”
As chipmakers pivoted toward HBM, production of DDR4 memory — still vital for many PCs, servers and lower-cost devices — contracted sharply. Samsung and Micron informed customers of plans to wind down DDR4 shipments, though Samsung later reversed course. The contraction has compounded the shortfall just as the global PC and data-center markets entered a replacement cycle. Prices for server memory have risen as much as 60 percent, and SK Hynix has already sold out its production through 2026.
The repercussions are rippling through consumer markets. Reuters reports that Xiaomi and Realme expect to raise smartphone prices significantly, with Realme warning of increases of up to 30 percent by mid-year. Laptop maker ASUS said it will adjust pricing as its own inventory declines. Smaller firms like Taiwan’s Winbond are facing overwhelming demand, with customers requesting unusually long-term contracts to secure supply.
Retailers and traders are responding to extreme volatility. In Tokyo’s Akihabara electronics district, stores are rationing purchases, and prices for popular DDR5 products have more than doubled in weeks. Secondhand markets are booming, and some Chinese distributors are stockpiling tens of thousands of units in anticipation of ongoing price spikes. In California, recycling companies that harvest memory chips from decommissioned servers are reporting soaring demand and sharply rising monthly sales, driven largely by buyers in Hong Kong and mainland China.
The Reuters investigation suggests the shortage will shape the global technology landscape for years. With demand continuing to surge and new manufacturing capacity years away, industries from smartphone makers to AI developers are bracing for sustained volatility, elevated costs and potential project delays as the race for memory intensifies.
