China’s largest contract chipmaker, Semiconductor Manufacturing International Corp (SMIC), has raised concerns about a possible memory chip shortage that could affect the wider electronics supply chain. During an earnings call, CEO Zhao Haijun said customers were becoming cautious with their orders for non memory chips as uncertainty increased around future supply. He said “Everyone is hesitant to place too many orders or ship too much in the first quarter of next year because they do not know how many mobile phones, cars or other products the memory chip industry can supply.”
This warning comes as several chipmakers and analysts caution that a global shortage of memory chips could impact consumer electronics and automotive industries next year. Many manufacturers are shifting production towards high margin memory components that power artificial intelligence systems. Industry experts told a common news platform that the main bottleneck is the growing focus on advanced memory used in AI computing, especially High Bandwidth Memory. AI servers depend heavily on this technology, which has become a priority for major suppliers.
Dan Nystedt, vice president of research at TriOrient, said “The AI build out is absolutely eating up a lot of the available chip supply, and 2026 looks to be far bigger than this year in terms of overall demand.” He explained that AI customers are ready to pay premium prices for advanced memory, leaving fewer resources for cheaper chips used in personal computers, smartphones and vehicles. He added that this could create serious challenges for industries that rely on affordable memory products.
The memory sector also experienced deep slumps in 2023 and early 2024, which led to reduced investment. Although companies are now increasing capacity, analysts expect that new supply will take time to reach the market. Prices are already rising. A common news outlet reported that Samsung Electronics has increased prices for some memory chips by up to 60 percent compared with September. The company has not commented.
Analysts say supply tightness is already affecting low end smartphones and set top boxes and warn that the impact could widen. China is facing the situation more sharply due to its large market for low cost devices, but the issue is global. Market research firm TrendForce said the memory sector has entered a strong upward pricing cycle and that rising costs may push brands to increase retail prices for smartphones, notebooks and other devices.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter
About us:
The Mainstream formerly known as CIO News is a premier platform dedicated to delivering latest news, updates, and insights from the tech industry. With its strong foundation of intellectual property and thought leadership, the platform is well-positioned to stay ahead of the curve and lead conversations about how technology shapes our world. From its early days as CIO News to its rebranding as The Mainstream on November 28, 2024, it has been expanding its global reach, targeting key markets in the Middle East & Africa, ASEAN, the USA, and the UK. The Mainstream is a vision to put technology at the center of every conversation, inspiring professionals and organizations to embrace the future of tech.
