Phone crisis: Chip shortage underway

Shortages in the global supply of memory chips are causing serious problems in the technology sector. While artificial intelligence investments are constricting the supply of components such as DRAM and flash memory, prices have more than doubled since February. Japan has imposed restrictions on the sale of memory products, while Chinese manufacturers state that cost increases will be reflected in prices.

ECONOMIC IMPACTS OF THE MEMORY CRISIS

The memory chip shortage could affect not only the technology sector but the general economy as well. Economists state that this situation could slow down AI-based productivity gains and delay digital infrastructure projects. Sanchit Vir Gogia, CEO of Greyhound Research, notes that this crisis has become a macroeconomic risk and emphasizes that AI investments are straining the supply chain.

RISE IN PHONE PRICES EXPECTED

As major technology companies increase their demands on memory chip manufacturers, giants such as Google, Amazon, Microsoft, and Meta have stated that they will purchase from Micron regardless of price. Chinese phone manufacturers Xiaomi and Realme have announced that they will reflect the increase in memory costs in their prices. Realme executive Francis Wong stated that the increase in memory costs is unprecedented and that phone prices could rise by 20 to 30 percent.

The memory crisis deepened further with the acceleration of data center installations following the launch of ChatGPT at the end of 2022. As manufacturers allocate more capacity for Nvidia-focused AI processors, the supply of traditional DRAM and flash memory has tightened.

SK Hynix predicts that the shortage could last until the end of 2027, and the company's chairman, Chey Tae-won, states that they could become unable to conduct business if they cannot keep up with supply demands.

News Source: 12punto