The steep rise in memory chip prices is expected to continue on the back of heightened demand from the artificial intelligence industry, while average consumers are likely to pay more for a new smartphone, according to analysts.
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Memory chip prices were forecast to increase 30 per cent in the fourth quarter this year and a further 20 per cent in 2026, following a 50 per cent surge year to date, Counterpoint Research said in a report on Thursday.
The higher cost reflects the rapid shift in strategy for the major memory chipmakers, as they focus more on supplying large-capacity storage products for enterprises involved in AI projects and those running data centres.
That has resulted in supplies of conventional memory products for consumer electronics being squeezed.
LPDDR4 chips, for example, are in tight supply. These synchronous dynamic random-access memory products, designed for high-speed performance with low power consumption, are widely used in certain servers and smartphones.
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The price increase was expected to be turbocharged once US semiconductor giant Nvidia started using LPDDR4 chips in its AI servers to lower power consumption, according to Counterpoint.
The high demand for DDR4 and LPDDR4 chips had led to a severe shortage and relentless price escalation in China, a Shenzhen-based agent of imported chips, who declined to be named, said on Friday.