A memory shortage threatens to make everything from iPhones to laptops more expensive

The paper clip problem always seemed too absurd to me. This is also known as a paperclip maximizer philosopher Nick Bostrom's thought experiment This imagines how a super-intelligent AI with the goal of maximizing the production of paper clips could end up destroying the world by using all available resources to produce paper clips.

While it would be irresponsible to say this is happening, we are slowly running out of some resources. And it will affect your life.

You may have heard about the global storage shortage This is partly due to the rapid construction of AI data centers. Just as they require semiconductors for data processing and water for cooling, these devices require memory or RAM for short- and long-term data storage. Almost all consumer electronic devices, from desktop computers to smartphones, also require memory to operate. The problem is that just three companies – Micron, SK Hynix and Samsung Electronics – make almost all of the memory on the market. They can't do it fast enough right now, and it's unclear when they will be able to keep up with demand.

Normally the lack of a computer component wouldn't prompt me to reference a thought experiment about the apocalypse, but here we are. Memory is a really important component, and as the AI ​​data center boom consumes more and more resources, a lack of it means that virtually every device with a chip becomes either more expensive, less innovative, or both. You can think of it as similar to the dreaded combination of inflation and stagnation that has become known until the 1970s And revived by the second Trump administration: stagflation. These things cost more and are generally worse.

Prices are already rising, and manufacturers are already pointing to memory shortages to explain it. What you can expect in the coming months and possibly years is a slowdown in the kind of spec fluctuations you've come to expect from new models. (This year's iPhone Pro 17, for example has 12GB of RAM compared to the 8GB in the iPhone 16 Pro.) Manufacturers may even be opting for cheaper options for components like displays or batteries, in ways that may not be immediately obvious.

“They're looking for ways to cut corners during this period to offset storage costs,” said Ryan Reith, group vice president at research firm IDC. He added that some companies simply aren't building the more powerful devices they want to build in the near future. IDC, meanwhile, predicted Smartphone sales will decline in 2026 due to memory shortages.

There is also hoarding. There are a number of different types of memory, but one that is essential for AI is called DRAM. DRAM is found in devices large and small – laptops, gaming consoles, televisions, cars – and with the big three memory makers funneling more of that supply to AI data centers, there is less available to device makers. As a result, some companies stockpile storage, which results in both drive up prices and reduce supply.

The other acronym you should know here is HBM, which stands for High-Bandwidth Memory. This is a type of DRAM specifically designed to work with high-performance processors like Nvidia's Blackwell chips that fill AI data centers. The profit margins of this type of storage is approximately twice the type of DRAM This goes into consumer gadgets, so memory manufacturers naturally invest additional resources in manufacturing, contributing to the consumer memory backlog.

It will take a while for this situation to be resolved. To build more memory chips, memory makers need to build more factories, called fabs, and that process takes years. Micron, for example, will soon begin construction on a factory in upstate New York that will not begin memory production until 2030. The company's managing director, Sumit Sadana said CNBC last week“We are sold out for 2026.”

None of this means that when you go to the smartphone store in six months, you won't be able to buy one – or that it will be twice as expensive. On the contrary, device manufacturers want to avoid sticker shock. What you'll likely find, however, is that the price of the base model remains the same, but the components inside aren't as good as they would have been. If you want the version with more storage, you'll pay an even higher premium for these specs than you did last year.

“The price increase is not over yet,” said Reith.

We don't know how this will end yet. On the one hand, the data center boom that is gobbling up all the storage is closely related to the AI ​​industry May or maybe not be a bubble about to burst. On the other hand, the trend of rising prices extends across industries. While the inflation rate has remained stable, it continues cost more than a year agoand they don't get any cheaper. If smartphone or laptop manufacturers realize that they can sell an inferior product for the same price as the better one, they may want to do so, regardless of any shortages.

When we talk about the affordability crisis, we are not necessarily talking about a cost-of-living crisis. Affordable means reasonable. It doesn't seem reasonable to us that the average consumer is faced with worse products than the AI ​​industry is creating billionaires at a record pace. The world isn't ending any time soon, but you're probably starting to feel the effects of change in one way or another.

A version of this story was also published in the User Friendly newsletter. Register here So you don't miss the next one!