If you’ve listened to the executives of big tech companies over the last couple of weeks, you wouldn’t be wrong in thinking that the second half of 2026 is gonna hurt thanks to the competing demands for the facilities that manufacture components for consumer laptops, smartphones, external storage devices, gaming consoles and more.
“RAMageddon” — the nom-de-crise attached to the current memory-supply shortage and resulting inflation — is top-of-mind for everyone, but the shortages we’re experiencing are really for anything created in a semiconductor fab. That’s because fab resources have, are, or are expected to be reallocated toward whatever’s ultimately the most profitable. Right now, that means anything critical to AI — or anything with AI in the name. And that pressure carries all the way down the supply chain.
Which is why even Apple CEO Tim Cook noted the “availability of advanced nodes our SOCs are produced on” (referring to M- and A-series processors) as one of that company’s biggest woes. It’s even considering options beyond its long-term supplier, TSMC, to Samsung and Intel fabs. Apple’s experiencing real problems, with system configurations disappearing quickly.
Mac Studio models with 128GB memory are one of the many configuration choices that disappeared from the Apple Store.
Cook brought up the component crisis during Apple’s quarterly earnings call with financial analysts last week. Most of the big tech companies had those calls in the past couple of weeks, and what execs like Cook said paints a bleak picture of how this supply squeeze will affect prices for consumer hardware in the months and years to come.
While buyers of gaming hardware are feeling the crunch now as console and system prices rise, it’s likely going to get worse before it gets better. There are three major fabs for memory — Samsung, SK Hynix and Micron — and Samsung said it’s already sold out its production capacity through the end of 2026. Micron left the consumer RAM business in 2025.
AMD, which supplies the chips in the consoles as well as consumer CPUs and GPUs across the board, said in its call that it expects its gaming revenue to drop by 20% in the second half of the year compared to the first half, and that it’s already seen slower desktop sales due to memory and component prices. Microsoft also expects a decline in PC sales thanks to increasing memory costs. For desktops especially, memory price charts looked for a while like the hockey stick typical of fantasy profit forecasts, though they seem to have leveled off for the moment.
Higher prices will mean companies expect to sell fewer products. “Constraints and rising prices around key components like memory, wafers and substrates are driving higher costs that could impact demand for our product at some point in the year,” said Intel CEO Lip-Bu Tan.
One potential bright spot for computer makers is around business-focused hardware built to run AI tools. “We’re making very good progress in the commercial PC arena with our AI PCs,” AMD CEO Lisa Su said.
How are companies responding to higher prices? Many times, they’ll look for other features to catch consumers’ eyes. “Looking at actually other parts of technology and computing, it could be size of screen, quality of screen, some of the AI features, but really other things that will drive interest into the category and make up for some of the pressure that we’re gonna see from a memory perspective in total,” Jason Bonfig, Best Buy’s senior executive vice president and chief customer, product and fulfillment officer, said during the company’s call in March.
What’s rarely mentioned when companies push AI at the expense of more memory, though, is that any work that incorporates information from lots of sources on your system, accumulates the results of multiple steps in an agent flow or loads a moderate size LLM requires more memory. Microsoft admitted to me that, though a base Windows Copilot Plus PC has 16GB RAM, you really need 32GB to do any substantive AI tasks.
Processors with NPUs — neural processing units which are optimized for AI tasks that can be performed without using a lot of power, such as background removal in videoconferencing — are close to universal in mid-to-high price laptops.
So when does RAMageddon hit full steam? “I think we’re already starting to see some costs, some prices go up because of the memory in some small parts of categories,” Best Buy Senior Vice President and Chief Financial Officer Matt Bilunas said, in what feels like a huge understatement. “It has begun a little bit.”
But that company’s still in the process of selling through current inventory, so that perspective makes some sense. “In computing, you’ve actually seen less pure cost increases and more of a general slight pullback in promotions from computing vendors, which is the first thing they’ll do under this memory situation,” Bilunas said.
Retailer PC Connection’s President and CEO Timothy McGrath commented in its call “It’s really clear that the memory shortage is going to continue to drive inflation. And what we’re seeing with that inflation is that the price is going up, and in some cases, the unit counts are going down. However, the inflated prices are little more than offset the reduction in units, at least at this time.” In other words, as the volume of products drops, prices will likely rise more to compensate.
Secondary effects of the shortage
Changing the available product mix to favor premium laptops, desktops and more over more affordable models means we don’t just see supply- or demand-driven price increases. It means that what few components consumer electronics manufacturers have is likely to be incorporated into their highest-margin (in other words, most expensive) products, resulting in a secondary inflationary effect. Until there’s more manufacturing capacity, it’s a zero-sum market.
So many laptops with AI branding.
“If you had to choose between which devices you put your memory allocation to, you would pick the premium and the high tier. That is where the profitability sits, and that is what you are seeing happen in the market,” Qualcomm CFO Akash Palkhiwala put it during that company’s call.
It’s not just about price for the suppliers, either. It’s also about revenue stability. SanDisk, which manufactures solid-state storage, has become more inclined to prefer multiyear agreements with its customers than it has in the past. “Other customers come into the conversation very used to the way the market has worked in the past, where, you know, they commit volume and wanna negotiate price every quarter. That’s not the kind of agreement we’re interested in,” said CEO David Goeckeler in SanDisk’s call.
Those customers are consumers of large volumes of SSD — enterprises and data centers. Companies building out data centers to feed the AI maw have the luxury of agreeing to multiyear commitments, because their bills have not yet come due. Sales of consumer devices fluctuate too much for those types of contracts. Goeckeler sees the demand for more storage in phones rising this year. “Now what will we supply? That’s an interesting question.” Goeckeler answered himself. “We’re gonna supply the customers that we have agreements with. That’s the way we’re starting to look at the market.”
On the flip side, SanDisk is a consumer of DRAM, the most popular type of memory for computers and other electronics. They’ve invested in Nanya, one supplier of the LPDDR5X memory overwhelmingly used by laptops and mobile devices, to ensure “preferential treatment in terms of access to DRAM,” per CFO Luis Felipe Visoso. That tightens supply even more for the products you buy.
The component shortages have a compounding effect as well. Companies don’t like to stock a lot of inventory when they’re equipped with short-supply parts with volatile prices, instead concentrating on just-in-time stocking, exacerbating the problem of finding the electronics you’re looking for, much less at prices you can stomach.
Even products you may not even consider affected aren’t untouched. Roku, which makes streaming TV devices and operating systems (as well as its own TV), can’t ignore it either. On its earnings call, CFO and COO Dan Jedda said rising memory prices and falling retail prices mean shrinking profit margins for makers of streaming devices. “No one knows what will happen to memory prices beyond this year or how the CTV market will react.
Tom Conrad, CEO of speaker manufacturer Sonos, offered more detail about his company’s position, explaining that the push for AI’s demand for DDR5 and High Bandwidth Memory is accelerating the production switchover from DDR4. “That is tightening supply for the DDR4 chips we use and increasing costs across consumer electronics. Our global operations team has been focused since early 2025 on securing sufficient supply to support our manufacturing demands.”
The real question is how long this is going to last. Thomas Baker, senior vice president and chief financial officer of PCC, said suppliers and partners have a wide range of guesses. “Some people are saying through — even into ’28, ’29, and others are saying through ’26,” he said. “So I think it’s a little bit of a wait and see.”
Yeah, we don’t know either.
Stephan is the sports journalist for the Maple Grove Report.
