Intel CEO warns memory shortage will worsen amid surging AI demand

Intel ↗ 7.71% CEO Lip-Bu Tan warned on Tuesday that the global memory shortage will grow more severe, telling attendees at the AI Infrastructure Summit 2026 in Santa Clara, California, that memory prices have already surged five to seven times and that many projects are being delayed because companies cannot secure enough supply.sedaily+1

"When I said early last year that memory could become a major bottleneck, I think many people didn't realize it," Tan said. "It actually happened, and the situation will get worse from here."sedaily

A Shortage With No Quick Fix

Tan's remarks came the same day as fresh warnings from across the industry that the memory crunch driven by surging AI demand has no near-term resolution. Dell Technologies ↗ 3.67% CEO Michael Dell told investors at the Goldman Sachs ↘ 0.36% Communacopia + Technology Conference last week that the structural chip shortage is "probably" going to be worse in 2027 than in 2026.news.futunn+1

"The pace of technological advancement in the large-model space — particularly the transition from foundational large language models to inference models and agent-based models — is far shorter than the construction timeline required to build a new chip fab," Dell said.news.futunn

Dell added that his company would pass rising costs on to customers and that their primary concern would soon shift from price increases to whether supply can be guaranteed at all.news.futunn

Yorkville America Equities CEO Steve Neamtz told Benzinga that new factories capable of materially easing the shortage may not reach full production until 2028 or 2029, noting that producing high-bandwidth memory consumes roughly three times the manufacturing capacity per gigabyte of conventional memory. Micron ↗ 5.12% CEO Sanjay Mehrotra said in June that supply should improve gradually in 2028 but the company had no "line of sight" on when it would catch demand.finance.yahoo

Long-Term Contracts Offer a Buffer

Samsung Electronics expects the global memory shortage to persist through 2028 and has signed long-term agreements with major data center operators, aiming to cover 60 to 70 percent of its production capacity through rolling contracts. SK Hynix ↗ 2.78% has completed multiyear agreements with around 10 key customers, and its CEO said in July that the industry faces its worst-ever supply shortage in 2027.ajupress+1

As Tan noted at the summit, the challenges extend beyond chips themselves. "Everyone knows about the power problem," he said, adding that cooling technology and system-level architecture are becoming equally pressing concerns for the AI infrastructure buildout.sedaily