Global RAM and Storage Shortage: AI Boom Pushes Memory Prices Higher

The wider tech industry is in a bit of a pickle with a growing global shortage of memory chips as demand from Artifical Intelligence (AI) data centres for RAM and storage chips continues to ramp up. This is driving up prices and creating problems for manufacturers of PCs, smartphones and all the other gizmos that use memory. The shortfall is set to get worse through 2027, with memory manufacturers warning that it could take several years for supply to catch up with demand.

Why is there a global memory shortage?

The explosive growth of AI infrastructure is one of the key reasons for the shortage. AI data centres require vast amounts of DRAM, HBM and NAND flash to train and run increasingly powerful AI models. As demand goes up, memory manufacturers are focusing their efforts on the high-value memory products that go into AI servers. That's putting pressure on the availability of more conventional memory products that go into the consumer space.

Micron CEO Sanjay Mehrotra cautioned that the supply situation could remain difficult for years to come. During the company's earnings call, he said, "much tighter in calendar 2027 and 2028 than they were in 2026". He also made it clear that increasing production would not immediately fix the issue, explaining that new DRAM and NAND fabrication facilities take time to ramp up and contribute meaningfully to supply.

RAM and SSD Prices Face Further Pressure

The shortage is impacting both DRAM (the technology used for RAM) and NAND flash (used in SSDs and other forms of storage). TrendForce says conventional DRAM contract prices are expected to go up 10-15% in Q4 2026, while NAND flash prices are forecast to rise 15-20%. The situation has also raised concerns among memory distributors and component manufacturers. TeamGroup CEO Chen Ching-wen has warned that the shortage could become particularly difficult between late 2026 and early 2027.

Speaking at the company's November 2 earnings conference, Chen said, "We have contracts but can't get enough volume." He explained that the company has had to turn to the spot market and pay a premium to secure supplies. He also warned that buyers could find themselves in a situation where "even money can't buy goods" as the difficulty of securing sufficient memory increases.

How long could the shortage last?

The outlook is still very much up in the air, though industry executives expect the supply constraints to persist well beyond 2027. Mehrotra says Micron does not yet have a clear timeline for when supply and demand will return to balance. Chen at TeamGroup expects the market imbalance to persist right through to the second half of 2028 and potentially beyond.

Manufacturers are looking at adding further production capacity, though it takes time to actually build semiconductor fabs and ramp up output. In the meantime, AI companies are continuing to pour money into data centres and computing infrastructure.

What does this mean for consumers?

The shortage could see laptops, desktops, smartphones and storage products all go up in price. Manufacturers may simply pass the increased costs on to consumers in the form of higher retail prices, or they may reduce the memory configurations in their products or put off the next generation of product upgrades. Budget and mid-range devices are likely to be under the most pressure, as manufacturers in these segments are already operating with very tight margins.

For consumers, this could mean paying more for a device with more RAM and storage. Those planning to upgrade their computers or buy additional SSD storage may also face higher prices.

AI infrastructure is continuing to drive demand, and the memory market is likely to stay under pressure for the foreseeable future. The shortage is a clear example of how the expansion of AI is having an impact beyond software and computing services, with consequences for the hardware used in everyday electronic devices.