AI-driven memory chip shortage pushes electronics prices to new highs

A global memory chip shortage driven by insatiable AI infrastructure demand is now hitting consumers across every price tier of electronics, from budget smartphones in India to flagship iPhones in South Korea and basic PC builds in South Africa.

Budget Phones and Flagships Alike Feel the Squeeze

Vivo Mobile India confirmed price increases of up to ₹5,000 across its budget T-series smartphone lineup, effective August 23, 2026. The Vivo T5x 5G received a flat ₹5,000 hike across all configurations, pushing its base model from ₹24,999 to ₹29,999, while the T5 Lite saw ₹4,000 increases and the older T4 Lite rose by ₹3,000. The company cited continued increases in input costs driven by the global memory component shortage.paidfreedroid

Meanwhile, the iPhone 18 Pro is expected to start above 2 million won (approximately $1,440) in South Korea when Apple ↗ 1.23% unveils it next month — more than 400,000 won above its predecessor's starting price. According to TrendForce, component costs for the device will surge roughly 40 percent compared with the iPhone 17 Pro, with memory chips now accounting for about 34 percent of total component costs, up from 10 percent a year earlier. Apple CEO Tim Cook has described the surge in memory prices as "a once-in-a-hundred-year flood".biz.heraldcorp+1

A Crisis With No Quick Fix

In South Africa, MyBroadband reported that 16GB of DDR4 RAM has become 229 percent more expensive over the past year. J.P. Morgan JPMorgan Chase & Co. ↗ 0.40% Global Research estimates that DRAM prices will have risen more than 400 percent from the start of 2024 to the end of 2026.jpmorgan+1

The crisis traces back to AI data centers absorbing a disproportionate share of global memory production capacity. Counterpoint Research reported that global smartphone shipments fell 11 percent in the second quarter of 2026, the lowest level since 2013. Bloomberg reported IDC's forecast that the smartphone market will contract 12.9 percent for the full year. Deloitte has warned that elevated prices may persist until 2029 or even 2030.deloitte+2

No Relief in Sight

Business Insider reported in June that the shortage is expected to worsen, with analysts projecting further pricing pressures into 2027 and beyond. Memory chips' share of smartphone component costs is projected to exceed 40 percent in the first half of 2027. For consumers worldwide, the age of affordable memory appears to be over — replaced by what the industry has termed "chipflation."businessinsider+1