SEOUL, Dec 3 — An acute global shortage of memory chips is forcing artificial intelligence and consumer-electronics companies to fight for dwindling supplies, as prices soar for the unglamorous but essential components that allow devices to store data.
Japanese electronics stores have begun limiting how many hard-disk drives shoppers can buy. Chinese smartphone makers are warning of price increases. Tech giants including Microsoft, Google and ByteDance are scrambling to secure supplies from memory-chip makers such as Micron, Samsung Electronics and SK Hynix, according to three people familiar with the discussions.
The squeeze spans almost every type of memory, from flash chips used in USB drives and smartphones to advanced high-bandwidth memory (HBM) that feeds AI chips in data centers. Prices in some segments have more than doubled since February, according to market-research firm TrendForce, drawing in traders betting that the rally has further to run.
The fallout could reach beyond tech. Many economists and executives warn the protracted shortage risks slowing AI-based productivity gains and delaying hundreds of billions of dollars in digital infrastructure. It could also add inflationary pressure just as many economies are trying to tame price rises and navigate US tariffs.
"The memory shortage has now graduated from a component-level concern to a macroeconomic risk," said Sanchit Vir Gogia, CEO of Greyhound Research, a technology advisory firm. The AI build-out "is colliding with a supply chain that cannot meet its physical requirements".
This Reuters examination of the spiraling supply crisis shows industry efforts to meet voracious appetite for advanced chips — driven by Nvidia and tech giants like Google, Microsoft and Alibaba — created a dual bind: Chipmakers still can't produce enough high-end semiconductors for the AI race, yet their tilt away from traditional memory products is choking supply to smartphones, PCs and consumer electronics. Some are now hurrying to course-correct.
Details of the global scramble by tech firms and price increases described by electronics retailers and component suppliers in China and Japan are being reported for the first time.
Average inventory levels at suppliers of dynamic random-access memory (DRAM) — the main type used in computers and phones — fell to two to four weeks in October from three to eight weeks in July and 13 to 17 weeks in late 2024, according to TrendForce.
The crunch is unfolding as investors question whether the billions of dollars poured into AI infrastructure have inflated a bubble. Some analysts predict a shakeout, with only the biggest and financially strongest companies able to stomach the price increases.
One memory-chip executive told Reuters the shortage would delay future data-center projects. New capacity takes at least two years to build but memory-chip makers are wary of overbuilding for fear it could end up idle should the demand surge pass, the person said.
"These days, we're receiving requests for memory supplies from so many companies that we're worried about how we'll be able to handle all of them. If we fail to supply them, they could face a situation where they can't do business at all," Chey Tae-won, chairman of SK Hynix parent SK Group, said at an industry forum in Seoul last month.
Samsung raised prices of server memory chips by up to 60 per cent last month, Reuters has reported. Nvidia CEO Jensen Huang, who in October announced deals and shared fried chicken with Samsung Electronics Chairman Jay Y. Lee during a trip to South Korea, acknowledged the price surge as significant but said Nvidia had secured substantial supply.
Google, Amazon, Microsoft and Meta in October asked Micron for open-ended orders, telling the company they will take as much as it can deliver, irrespective of price, according to two people briefed on the talks.
China's Alibaba, ByteDance and Tencent are also leaning on suppliers, dispatching executives to visit Samsung and SK Hynix in October and November to lobby for allocation, the two people and another source told Reuters.
"Everyone is begging for supply," one said.
The Chinese firms didn't address questions about the chip crunch. Nvidia, Meta, Amazon and OpenAI didn't respond to requests for comment.
