Shortage of memory and storage chips is emerging as a major global concern as artificial intelligence expands rapidly beyond software innovation. As AI systems become more advanced, demand for DRAM and other critical components has surged worldwide, creating a severe shortage that industry leaders warn could last for years. Executives including Elon Musk and Tim Cook have cautioned that the AI-driven chip boom may push the tech industry toward a broader global crisis.
The memory crunch is already affecting company earnings. Lenovo, the world’s largest PC maker, reported a 21% drop in profits. Over the past few months, major tech firms have invested billions in AI data centres, triggering a shortage of DRAM, a core component used in almost all modern devices. Cook has warned that the shortage could compress iPhone margins, while Musk suggested more drastic measures.
During an earnings call last month, Musk said Tesla may need to build a “TeraFab”, a large semiconductor facility to “remove the probable constraint in 3 or 4 years.” He stated that existing chipmakers such as TSMC, Samsung and Micron Technology are unable to supply Tesla with the required volume of chips. Micron recently shut down its consumer-facing brand Crucial. Musk added, “We’ve got two choices: hit the chip wall or make a fab”.
AI data centres are a key factor behind the shortage. Companies like Google and OpenAI have secured large orders of memory chips to power AI chatbots. This has pushed up prices of PCs, smartphones and laptops. A media report states that a type of DRAM saw a 75% price increase between December 2025 and January 2026, with supplies tightening even before new AI data centres are fully built. Sony is reportedly delaying the PlayStation 6 launch to 2028 or 2029, while Nintendo may raise prices for the Switch 2 this year. Companies such as Dell, Samsung and Xiaomi have also warned of price hikes, with estimates suggesting DRAM could soon account for 30% of a smartphone’s total bill of materials.
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 is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
