Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: Smart devices face supply chain challenges amidst AI demand in Simple Termsand what it means for users..
As devices from toys to cars grow smarter at the Consumer Electronics Show (CES) in Las Vegas, technology manufacturers are facing a worsening shortage of memory and storage chips essential for powering next-generation gadgets.
The dwindling supply and soaring cost of Dynamic Random Access Memory (DRAM) – crucial for running applications, multitasking and powering AI features – emerged as one of the most pressing behind-the-scenes concerns at the world’s biggest tech showcase.
Once cheap and readily available, DRAM and data storage chips are now in short supply as global demand surges due to artificial intelligence, with AI-powered systems expanding rapidly from data centres to wearable devices and consumer electronics.
“Everybody is screaming for more supply…they just can’t find enough,” said Sangyeun Cho, who oversees Samsung Electronics’ semiconductor operations in the United States. “And AI demand is still mounting.”
To meet soaring requirements from AI data centres, memory manufacturers have shifted capacity away from consumer markets. At the same time, AI-driven features being added to laptops, smartphones, smart home devices and even smart rings have significantly increased the need for DRAM and storage.
According to global market research firm IDC, the semiconductor industry is facing an “unprecedented memory chip shortage” that could extend well into next year.
“What began as an AI infrastructure boom has now rippled outward, with tightening memory supply, inflating prices, and reshaping product and pricing strategies across both consumer and enterprise devices,” IDC analysts said. “For consumers and enterprises alike, this signals the end of an era of cheap, abundant memory and storage.”
Prices for computers, storage drives and memory cards have already risen, industry players confirm.
Gadget makers forced to compromise features and costs
Manufacturers are responding in different ways – either paying premium prices for DRAM, redesigning products or sacrificing certain smart features, said Michal Siwinski of chip networking firm Arteris.
“Maybe the (robotic) dog you’ll get will sniff around and roll over, but it’s not going to bark a serenade because it doesn’t have enough memory,” he remarked.
The shortage is also pushing companies toward efficiency improvements, with engineers now writing tighter software code to reduce memory consumption.
“These aren’t bad things; they should have already happened,” said Other World Computing chief Larry O’Connor, who noted that the tech sector has relied on increasingly bloated software for decades.
However, analysts warn that manufacturers must balance performance expectations with pricing pressures. Either product could underperform due to memory limitations, or retail costs could rise sharply.
On the CES show floor, companies continue to boast premium performance claims, but industry discussions behind closed doors reveal a much more cautious outlook, said Techsponential analyst Avi Greengart. Many brands are now quietly modifying hardware plans to keep consumer pricing stable.
Concerns extend to AI chip supply chains
The escalating memory chip shortage is also being closely monitored by sectors dependent on AI processing chips. Although AI silicon is different from DRAM, companies fear similar supply chain disruptions.
Infineon Technologies CEO Jochen Hanebeck said clients are increasingly cautious after witnessing the DRAM crisis unfold.
“Customers are asking about capacities, and I think they have seen the lessons learned on DRAM, and that’s why they are very mindful,” he said. “There is a good chance for a shortage; it is a real challenge to manage that supply chain.”
With AI computing continuing its rapid global expansion, analysts warn that semiconductor supply resilience will remain a critical concern for the technology industry in the coming year.
AFP
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