From computers to cell phones and even some car functions, most electronics use random access memory, or RAM. This is the basic hardware your computer's processor needs to run applications, open files, and surf the Internet.
But if you've been in the RAM market lately, you've likely noticed a big jump in prices as memory makers shift much of their production capacity from consumer products to supplying artificial intelligence companies that are rapidly building data centers that require huge amounts of memory to operate.
“Prices have skyrocketed since early November,” Mark Chen, a store manager for Uniway Computers, which sells custom RAM-equipped PCs in Calgary, told CBC News via email.
Back in October, Chen said he could find a 32GB DDR5 memory kit for less than $130. By mid-November the price had more than doubled to about $300.
Now, Chen says, it's hard to find the same memory kit for less than $400.
The latest blow to the consumer market comes from Micron Technology Inc., which is considered one of the three largest RAM manufacturers in the world. announced last week it is ditching its consumer-facing Crucial brand and is instead shifting its focus to providing memory and storage systems to fast-growing data center customers using artificial intelligence.
Willie Shea, a professor of management practice at Harvard Business School, explained that Micron is reallocating its manufacturing resources to artificial intelligence companies, “where, frankly, they can make a lot more profit.”
“I have never seen such a large jump in RAM prices before,” Chen said. He said he saw similar volatility with graphics cards a couple of years ago due to the cryptocurrency boom, but never with memory.
AI boom fuels global memory shortage
As demand for AI grows, companies like Open AI, Meta and Google are looking to rapidly develop data centers while becoming more lucrative clientele for chip makers.
AI data centers use large amounts of high-bandwidth memory, a type of high-performance dynamic RAM, or DRAM, needed to handle high-volume AI workloads. While the average personal laptop can handle 16 gigabytes of memory, the AI memory component will have about 200 gigabytes, Shi said.
Micron and its two main competitors, Samsung and SK Hynix, “are all racing to meet this memory demand,” causing consumer prices to soar, Shi said.
He added that this is a logical business move: if the plant has limited chip production capacity, it will produce more valuable and in-demand devices designed for artificial intelligence tasks.
In fact, the demand is so great that Lenovo is stockpiling RAM According to Bloomberg, due to an unprecedented supply reduction.
And the huge possibilities of OpenAI Stargate Data Center Initiativewhich is scheduled to launch in 2029, has already secured obligations from Samsung and SK Hynix for up to 900,000 wafer (memory chip base) DRAM per month. That's equivalent to nearly 40 percent of global DRAM production, according to the company. Tom's Equipmentpublication about computer technologies.
DRAM, which is used in various forms in both consumer electronics and data centers, is under particular pressure. Because manufacturers have focused on developing high-bandwidth memory chips, less manufacturing capacity has been devoted to developing the type of DRAM used in personal computers, Shi said.
Last month Reuters reports this. Samsung has raised the prices of some memory chips by as much as 60 percent from just two months earlier. The company's memory division now generates nearly as much revenue as its mobile phone business. setting a record high for quarterly sales in the third quarter of this year.
The PC market is the first to bleed
While the race to capitalize on the artificial intelligence boom has sent consumer memory prices skyrocketing, it may not stop there.
“The prices of everything that uses memory will go up,” Shi said. Essentially, this is any electronic product: from mobile phones to smart refrigerators and modern cars.
All points of the West7:18Do you want to buy a new computer? Be prepared to be shocked by RAM prices.
International Data Corporation, a market research company based in the US, is already predicting that in 2026… fewer smartphone sales due to lack of memory components.
But the immediate impact is being felt in the personal computer market by parts retailers across Canada and by customers such as gamers and video editors who buy these individual parts to build their own PCs.
Chen said suppliers have raised the prices they charge Uniway Computers for RAM components, “so we have no choice but to reflect these higher costs in our final assembly prices.”
And rising memory prices are discouraging customers from building their own computers, Chen noted, as more customers switch to off-the-shelf systems from major PC makers.
At BCOM Computer Center in Edmonton, enterprise sales manager Dustin Plant feels the same stress.
“Because manufacturers are changing course… to meet the needs of those [AI] requirements, they don't produce what we sell, you know, day in and day out,” he said. “So supply has dried up across the board.”
Edmonton AM5:49lack of RAM
Prices for computer components are rising rapidly. Dustin Plant is a sales manager at BCOM Computers.
Plant said it's not just RAM that seems to be rising in price on a weekly basis: the cost of SSDs is also rising.
And graphics cards could be the next obvious market casualty, given their RAM usage, he added.
So how long will prices stay high?
It's hard to say, Shea said. Although memory components are experiencing a major boom cycle driven by AI demand, investors fear that AI “bubble” it might just burst.
“There is a huge amount of investment going on and at some point it has to turn a profit.”
On the PC side, Shi expects computer makers to potentially pass on additional manufacturing costs to consumers in the form of less generous PC memory configurations or fewer promotions.
Plant said anyone who might delay an upgrade should consider doing so, adding that it is difficult to predict how long the price increase will last.
And as Micron exits the consumer memory market and focuses on the AI clientele, he said, “this will only make a bad situation worse.”
As for other products that rely on memory, such as mobile phones, Shi said many companies pre-contract RAM components so consumers won't see an immediate price increase for those products.
“They're buying, you know, six months or a year in advance, right. So they may have locked in the price. So when you see an increase will depend on… how much your supplier had in stock,” Shea said.
