2024–2026 global memory supply shortage
The 2024–2026 global memory supply shortage is an ongoing period of supply constraints and rapid price escalation in the semiconductor memory market, particularly affecting DRAM and NAND flash memory. Unlike the 2020–2023 global chip shortage, which stemmed primarily from pandemic-related supply chain disruptions, this shortage is driven by a structural reallocation of manufacturing capacity toward high-margin products for artificial intelligence infrastructure, creating scarcity in consumer and enterprise PC markets.
Background
Following a severe market downturn in 2022–2023, major memory manufacturers—Samsung Electronics, SK Hynix, and Micron Technology—implemented strategic production cuts to stabilize pricing. By mid-2024, the rapid expansion of generative AI services triggered unprecedented demand for specialized memory products, particularly High Bandwidth Memory used in AI accelerators and data center GPUs. Specialized components of chip-making technology are also experiencing supply constraints due to high demand in AI application. For example, glass cloth, a high-performance glass fiber substrate used for power efficient high speed data transfer and a crucial component of chip-making, is experiencing supply crisis as Nitto Boseki, a Japanese firm having overwhelming monopoly in its production, is not able to meet increased demands making chip-makers such as Qualcomm, Apple, Nvidia and AMD compete for securing supply for their chips.A 2024 McKinsey analysis projected that global demand for AI-ready data center capacity would grow at approximately 33% annually through 2030, with AI workloads consuming roughly 70% of total data center capacity by the decade's end.
Causes
HBM production displacement
HBM manufacturing requires significantly more wafer capacity per bit than standard DRAM modules. Industry sources reported that as manufacturers allocated increasing wafer capacity to HBM production to meet contracts with AI infrastructure providers, the supply of conventional DDR4 and DDR5 modules for consumer PCs and smartphones contracted sharply.By September 2025, Samsung Electronics had reportedly expanded its 1c DRAM capacity to target 60,000 wafers per month specifically for HBM4 production, further diverting resources from consumer memory lines.
Geopolitical and trade barriers
The supply chain was further constrained by escalating trade tensions between the United States and China. Throughout 2025, fears of U.S. regulatory backlash and new tariff structures led major manufacturers like Samsung and SK Hynix to halt sales of older semiconductor manufacturing equipment to Chinese entities, effectively capping production capacity in the region. Additionally, proposed tariff policies by the U.S. administration in late 2025 prompted supply chain realignments, with Apple reportedly accelerating plans to source all U.S.-bound iPhones from India to avoid potential levies.NAND flash capacity constraints
In the NAND flash segment, manufacturers prioritized higher-margin enterprise SSDs for data center applications while phasing out older process nodes more rapidly than anticipated. In November 2025, contract prices for NAND wafers increased by more than 60% month-over-month for certain product categories, with 512GB TLC experiencing the steepest rise as legacy manufacturing capacity was retired.Impact on industry and consumers
Manufacturer responses
Major PC manufacturers responded to component cost increases with significant price adjustments and supply chain strategies. Dell Technologies Chief Operating Officer Jeff Clarke stated during a November 2025 analyst call that the company had "never witnessed costs escalating at the current pace," describing tighter availability across DRAM, hard drives, and NAND flash memory.Analysts at Morgan Stanley downgraded Dell Technologies stock from "Overweight" to "Underweight" in late 2025, citing the company's heavy exposure to rising server memory costs. The firm warned that skyrocketing memory prices could significantly erode margins for server and PC OEMs. Conversely, Apple Inc. was reportedly less affected than its competitors, having secured long-term supply agreements for DRAM through the first quarter of 2026.
Lenovo Chief Financial Officer Winston Cheng described the cost surge as "unprecedented" and disclosed that the company's memory inventories were approximately 50% above normal levels in anticipation of further price increases.
Consumer electronics sector
The shortage particularly affected smartphone manufacturers and other consumer electronics producers. DRAM prices reportedly rose by 172% throughout 2025, leading manufacturers like Samsung to halt new orders for DDR5 modules to reassess pricing structures and Micron to exit its 'Crucial' brand of consumer products.In Tokyo's Akihabara electronics district, retailers began limiting purchases of memory products to prevent hoarding, with prices for popular DDR5 memory modules more than doubling in some cases. Despite the broad trend of rising hardware costs, some companies engaged in aggressive pricing strategies to maintain market share; for example, Sony reduced the price of the PlayStation 5 by $100 for Black Friday 2025, potentially absorbing increased component costs to stimulate software ecosystem growth.
AI infrastructure competition
Technology companies including Google, Amazon, Microsoft, and Meta Platforms placed open-ended orders with memory suppliers, indicating they would accept as much supply as available regardless of cost, according to Reuters sources.In October 2025, OpenAI formally announced a strategic partnership with Samsung Electronics and SK Hynix to secure supply for its "Stargate" AI infrastructure project. Reports indicated that the Stargate initiative alone would consume up to 40% of global DRAM output, requiring approximately 900,000 wafers per month. The deal involved the supply of undiced wafers rather than packaged chips to streamline logistics for the massive data center build-out.
Nvidia, whose AI processors require substantial amounts of high-bandwidth memory, acknowledged significant price increases but stated it had secured adequate supply. CNBC reported that Nvidia's increasing adoption of LPDDR memory for its AI products added additional pressure to supply chains, as this memory type is also used in premium consumer electronics.