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AI Gold Rush Sparks 'RAMageddon', Price Hikes Hit Electronics
21 Sep
Summary
- AI demand for memory chips causes severe component shortages.
- Electronics prices surge, reversing decades of falling costs.
- Chip shortages are predicted to last beyond 2030, impacting prices.
The widespread demand for memory chips, driven by the AI gold rush, has created a significant shortage of critical components, leading to a phenomenon dubbed 'RAMageddon.' This supply crunch has reversed a decades-long trend of electronics becoming cheaper.
Component costs have sharply risen, with memory prices increasing over 300% year-on-year. Consequently, manufacturers are passing these increased costs onto consumers. Apple's latest iPhones saw a £100 price increase, affecting even older models due to shared component expenses.
Other manufacturers like Samsung and Google have also raised prices on their flagship phones by up to £80. The impact is felt across the market, with computer makers like Microsoft and Dell implementing substantial price hikes for their devices, some increasing by as much as 25%.
Gaming consoles are also affected, with Microsoft increasing the price of its nearly six-year-old console. Console storage and memory prices have more than doubled, with further increases anticipated. This situation is exacerbated by predictions that memory shortages could last beyond 2030.
Experts suggest that even when memory costs stabilize, electronics prices are unlikely to return to previous levels. Increases in this industry tend to be persistent, with companies opting to maintain higher prices and add value through features rather than reducing costs.
