From personal computers to smartphones, the tech industry is grappling with a memory chip supply crisis triggered by AI infrastructure expansion. Major players including Dell, HP, Xiaomi, and Lenovo have issued warnings that the shortage will drive up manufacturing costs across nearly all electronic products—from mobile devices to medical equipment and automobiles.
Dell COO Jeff Clarke told analysts during Tuesday's earnings call that the company had "never seen costs rise at the current pace." He noted price increases across all product categories—from high-bandwidth memory for AI to DRAM for PCs, along with hard drives and NAND flash storage. Dell stated it would consider all options, including repricing certain devices.
HP CEO Enrique Lores told media the second half of 2026 would be particularly challenging, with price hikes implemented as needed. The company is taking "aggressive measures" such as onboarding additional memory suppliers and reducing memory content per device. HP estimates memory accounts for 15%-18% of a typical PC's cost.
Counterpoint Research forecasts memory module prices could jump 50% by Q2 next year. Xiaomi has already raised flagship device prices and expects further mobile price increases due to the chip shortage. Management noted current memory price hikes reflect structural AI-driven HBM demand growth rather than traditional smartphone/notebook cycles.
**AI Boom Reshapes Production Allocation**
The shortage stems from manufacturers reallocating capacity toward complex, high-margin chips for AI systems, creating deficits in conventional memory types. Suppliers are prioritizing Nvidia, the dominant AI chipmaker assembling advanced data center systems. Analysts warn the crunch could constrain 2026 production of autos and electronics.
Logic chip suppliers may also suffer if customers delay orders amid memory shortages. These chips process data and are critical for AI systems.
**Stockpiling and Price Adjustments Underway**
Lenovo CFO Winston Cheng revealed memory inventories are ~50% above normal levels, while Asus is also stockpiling. Both PC makers plan stable holiday pricing with market reassessments in 2026.
Xiaomi secured full-year 2026 supply agreements with partners. President Lu Weibing acknowledged potential product price increases but emphasized structural optimization and premiumization. The company maintains its 2025 smartphone shipment target of ~170M units, prioritizing product mix over volume.
Lenovo highlighted scale advantages for market share gains but echoed Dell's "unprecedented" cost surge characterization. Apple struck a more optimistic tone, with CFO Kevan Parekh citing "modest inflationary pressure" but effective cost management, benefiting from its position as a top supply chain customer.
**Supplier Valuations Soar Amid Tight Market**
Samsung, SK Hynix, and Micron have seen shares surge as inventory dwindles. SK Hynix reported selling out its 2026 memory lineup, while Micron expects tight supplies through 2026. Japan's Kioxia Holdings has doubled since its December IPO on similar dynamics.
"Demand for all memory products—advanced and legacy—is exceptionally strong against lagging supply," said CLSA's Sanjeev Rana, predicting multi-quarter DRAM/NAND price increases. SK Group Chairman Chey Tae-won warned of persistent bottlenecks, stating: "We're fielding countless supply requests and strategizing how to fulfill them."
The AI infrastructure race has already inflated energy costs near data centers. Now, the memory crunch is transmitting cost pressures across the consumer electronics supply chain.