Rising AI Memory Costs Expected to Worsen in Coming Years
Intel CEO Lip-Bu Tan warned that memory prices have surged between five to seven times their previous levels, now accounting for about 75% of the cost of some lower-end phones and laptops. The shortage is expected to worsen into 2027 due to severe supply constraints across key components like logic chips, silicon wafers, and subscripts. Micron Technology has $100 billion in take-or-pay contracts and $22 billion in customer deposits that maintain high pricing above prior peak margins. Micron's fiscal Q3 gross margin reached 84.9%, driven by strong DRAM and NAND pricing gains. SK hynix also warned of potential supply issues extending into 2027, aligning with Intel’s guidance for increased capital expenditures in the coming years. Market reactions have been significant: Micron has surged over 247% year-to-date, while SK hynix and Intel have risen by 18.04% and 190.6%, respectively.
Topics: chip shortage Intel memory prices Micron semiconductors SK hynix