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Consumers should prepare for price increases this year, of as much as 20 per cent for smartphones, computers and home appliances, analysts and manufacturers have warned, as artificial intelligence demand drives up the cost of memory chips used in electronics.
Consumer electronics makers including Dell, Lenovo, Raspberry Pi and Xiaomi have warned that chip shortages were likely to add to cost pressures and force them to raise prices, with analysts forecasting increases of 5 to 20 per cent.
Dell’s chief operating officer Jeff Clarke said during an earnings call in November that the company had never seen “costs move at the rate” they were rising now and the impact would inevitably reach consumers.
British PC maker Raspberry Pi called the cost pressures “painful” as it raised computer prices in December, while Lenovo, the world’s biggest PC maker, was stockpiling memory chips and other critical components, chief financial officer Winston Cheng told Bloomberg TV in November.
The global build-out of data centres to power AI models has spurred demand for cutting-edge high-bandwidth memory chips, leading chipmakers to deprioritise the lower-end semiconductors used in consumer electronics, said analysts.
This has created shortages of dynamic random-access memory chips, which are used in everything from cars to computers for temporary data storage. As a result, companies have been stockpiling chips and driving up semiconductor prices.
“We are already seeing a supply shortage across the board,” said Daniel Kim, an analyst at Macquarie. “The market is crazy with buyers in panic as they struggle to secure enough memory no matter how much they are willing to pay.”
Market researcher TrendForce forecast average Dram prices, including for HBM chips, would rise between 50 and 55 per cent in the fourth quarter of 2025 from the previous quarter.
Samsung and SK Hynix, the world’s two largest memory-chip makers with control over 70 per cent of the Dram market, said orders for 2026 had already exceeded capacity. Samsung last month raised the price of some memory chips by as much as 60 per cent.
“AI-related server demand keeps growing and this demand significantly exceeds industry supply,” said Kim Jae-june, a Samsung executive, during an earnings call in October.
Consumers could end up paying the price. Macquarie’s Kim forecast electronics prices would increase 10 to 20 per cent in 2026, while CW Chung, joint head of Asia-Pacific equities research at Nomura, expected a 5 per cent increase given companies could seek savings elsewhere.
Consumer electronics makers had no choice but to accept higher prices because cloud service providers such as Amazon and Google were signing long-term agreements with chipmakers to secure DRam supply for servers, according to Greg Roh, an analyst at Hyundai Motor Securities.
Big US technology companies were expected to spend $620bn on AI infrastructure in 2026, up from $470bn in 2025, according to Morgan Stanley, which forecast total global spending on AI data centres and related hardware would reach $2.9tn by 2028.
“AI data-centre inference demand is far greater than anticipated, depleting chip inventories for PCs and smartphones as well,” said Peter Lee, an analyst at Citigroup. “Supply will remain tight until 2027, with no additional capacity expected. Chip stockpiling will be worse in 2026.”
Lu Weibing, president of Chinese smartphone maker Xiaomi, which increased the price of its flagship product in October, said in November he expected supply chain pressures in 2026 to be “far greater than” in 2025.
Macquarie’s Kim warned that a worst-case scenario would involve the “serious supply chain disruptions seen during the pandemic”.
Samsung said in November it would add a chip production line at its South Korean plant, while SK Hynix is building a $91bn chipmaking cluster announced in 2024.
“We are thinking hard about how to address all demand,” said SK chair Chey Tae-won at a company event in November.
But the new capacity is not expected to come online soon.
“We are trying to increase supply, but it takes at least two to three years to build a chipmaking plant,” said an industry executive in Seoul.
Meanwhile, companies will have to “either raise product prices or sacrifice margins”, said Citi’s Lee.
