Consumers could wind up paying more for a variety of devices, including smartphones and other electronics, as a surge in demand from artificial intelligence and data centres sparks a global shortage of crucial semiconductor memory chips.
Memory chips are tiny electronic devices used to store information in a wide variety of applications, from smartphones and automobiles to robotics and scientific research, but with such high demand and rising prices for these chips, companies like Apple say they are “constrained.”
“We’re in a supply-chase mode to meet the very high levels of customer demand. We are currently constrained, and at this point, it’s difficult to predict when supply and demand will balance,” Apple CEO Tim Cook said in an earnings call with investors and analysts last week.
The cost of these chips is skyrocketing, in part, because demand from innovations in AI is outpacing the speed to build the necessary chips and other technology, and those higher costs could get passed on to consumers.
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According to a report from Counterpoint Research released Thursday, memory prices have soared as much as 90 per cent so far this year compared with the last three months of 2025. Counterpoint researchers said in the report that this marks “an unprecedented and record-breaking surge.”
Researchers also said global shipments of advanced smartphone chips are expected to decline seven per cent in 2026, partly because of rising costs.
“You get both happening at the same time, and companies are trying to increase production as fast as they can. It’s just a moment in time and it’s difficult to keep up.
“It hasn’t hit the smartphone market to the same degree — although it may drive up the cost of smartphones going forward.”
Typically, when a business does not have enough supply to meet the demand of its customers, scarcity drives up prices and consumers wind up paying more.
“Cellphones are trying to keep up with this sort of AI wave that we’re in right now, and you may find our portal into that, which is quite often our phone, that may end up being affected more than, let’s say, your common car,” says Eduardo Bailetti, an assistant professor of technology innovation management at Carleton University.
“And people upgrade their phones more often than their car too, right? So they may find a little bit more of an effect on that.”
One of the world’s largest smartphone chip manufacturers, Qualcomm, reported earnings results on Wednesday, and said it was also facing challenges from a shortage of memory chips and rising prices.
“While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high tier smartphones,” Qualcomm CEO Cristiano Amon said in the earnings release.
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