How the AI Memory Shortage Is Reshaping Consumer Electronics

The AI boom is changing the economics of consumer electronics. Memory makers are prioritizing high-bandwidth memory (HBM) and server DRAM for data centers, leaving phone, PC and console manufacturers to absorb higher costs, reduce specifications or raise prices. J.P. Morgan Global Research estimates DRAM prices could rise more than 400% from the start of 2024 to the end of 2026. 52

Samsung’s Galaxy S26 FE makes the shift visible at the product level. The phone starts at $699.99 and becomes generally available September 4. Reports describe an Exynos 2500 processor, 8GB of RAM and a design that remains broadly similar to the previous FE generation. 192124 Earlier reporting put the predecessor’s US starting price at about $649, making the new model roughly $50 more expensive despite limited memory expansion. 20

The new consumer trade-off: higher prices or slower upgrades

In a normal smartphone cycle, a new model is expected to add memory, storage, camera capability or processing power without substantially increasing the price. A constrained memory market reverses that expectation.

Samsung’s FE strategy suggests one way manufacturers can protect a product category: keep the RAM configuration conservative and update selected components rather than substantially increasing the bill of materials. The result is not necessarily a worse phone, but it is a less dramatic upgrade for the money.

There is also an important correction to the original S26 FE description. The available product reports identify the device as using Samsung’s Exynos 2500, not a MediaTek processor. 181921 One report describes a different configuration, so the processor and memory details should be treated cautiously where reports conflict. 23

Apple is passing part of the shock to customers

Apple provides the clearest evidence that the memory squeeze is reaching even companies with substantial purchasing power. CEO Tim Cook described the situation as a “100-year flood” in memory pricing and said Apple had reluctantly raised prices. 110

Reports say Apple increased prices across parts of its Mac and iPad ranges, with some increases of $100 to $300. 1214 The company also warned that supply constraints would affect iPhone, Mac and iPad sales in the September quarter. 1

Apple’s forecast gross margin of roughly 47% to 48% for that quarter indicates that price increases are not fully neutralizing the cost pressure. 7 Forecasts of a $200-to-$300 increase for the iPhone 18 Pro remain analyst estimates, not announced Apple pricing. 3

That distinction matters: confirmed price changes show what Apple has already done, while future iPhone pricing remains speculative until the company announces it.

Consoles are losing the expectation of falling prices

The memory shortage is also weakening a familiar pattern in gaming hardware: prices often decline as manufacturing improves and a console moves into the later part of its life cycle.

Sony’s standard PS5 has reached $649.99, compared with its $499.99 launch price, according to reporting on the console’s price changes. 33 At the same time, Sony has said it secured enough memory to meet its projected PS5 sales volume through the fiscal year ending in March 2027. 3436

Those facts are not contradictory. Sony appears to have protected its near-term sales plan, but securing enough memory for a forecast is different from obtaining unlimited supply at a price that supports aggressive discounts or an inexpensive next-generation console. The memory market can therefore affect product planning even when current PS5 shelves remain supplied.

Why AI infrastructure has more leverage

Consumer-device companies are competing for memory with cloud providers and AI infrastructure operators whose spending is tied to rapidly expanding data-center capacity. HBM and advanced server memory command higher margins, giving manufacturers a financial incentive to prioritize those products when production capacity is limited. 5052

That changes negotiations across the electronics industry. Phone, PC and console makers may respond with longer-term supply agreements, more cautious inventory planning and fewer low-margin promotions. Product lines could become more sharply segmented: premium models retain larger memory configurations, while mid-range devices keep familiar specifications at higher prices.

For consumers, the effect may be subtle before it becomes dramatic. A company does not need to remove a feature entirely to pass along higher costs. It can hold RAM steady, reduce storage at a given price, trim discounts or delay a major hardware refresh.

The shortage may last, but its endpoint is not certain

The current squeeze differs from a short-lived logistics disruption because its main driver is continuing investment in AI capacity. J.P. Morgan says the imbalance could take years to unwind, while IDC expects memory-supply challenges to persist through 2026 and likely into 2027. IDC’s forecast places stronger smartphone growth in 2028, but that is a forecast rather than a guaranteed recovery date. 5259

It is therefore too early to conclude that consumer-device pricing power has permanently shifted to memory suppliers or AI-chip companies. Semiconductor markets remain cyclical. If manufacturers expand capacity while hyperscalers and device makers over-order, a later slowdown could create excess inventory and push prices down sharply.

The more defensible conclusion is narrower: AI infrastructure has changed the bargaining environment for consumer electronics, at least for now. Samsung’s higher-priced, conservatively configured Galaxy S26 FE illustrates the consumer-facing result; Apple’s price increases show the margin impact; and Sony’s supply planning shows why even well-stocked products can face a more uncertain future.