- Memory shortage due to AI doesn’t just affect PCs
- More capacity is coming, but not before 2027
- Low-margin economy products likely to be hit hardest
What do the best DACs, the best hi-res audio players, the best TVs, and the best soundbars have in common? They are all facing component shortages and price hikes – not because of tariffs, but because of the AI-driven shortage of memory and storage chips. And the pain will be particularly pronounced in the most affordable segment of the market, where profit margins are already thin.
As you probably know, the AI industry is buying a lot of memory for its data centers: as PK Press Club reported in October, just one AI company, OpenAI, intends to order 900,000 semiconductor wafers in 2029. That’s about 40% of total global production. And there is a lot more demand in the industry.
As the Wall Street Journal reported this week, “Rapidly building infrastructure for artificial intelligence is consuming much of the available supply of NAND flash, DRAM, and hard drives.” This has led to a shortage of memory for other markets such as PCs and smartphones. »
AV devices are not the same as PCs and generally don’t need as much memory as smartphones. But they still need a bit of memory to do what they do. Everything from smart speakers to smart TVs to in-car entertainment systems use RAM alongside their processors, and some of them also use NAND storage, because they’re just little computers at heart; the prices of these two components are skyrocketing.
We’ve already seen Samsung warn that the prices of its TVs could rise due to component shortages, while there have been warnings about smartphone makers cutting their specifications for this year’s mobile phones, reducing their memory to reduce manufacturing costs.
And according to NPR, memory prices are expected to rise again this year. As Avril Wu of consulting firm Trendforce told NPR, “I keep telling everyone that if you want a device, you buy it now.”
How AI Could Affect the VA
AI data centers don’t use the same memory chips as a DAC or high-resolution audio player: they use high-bandwidth memory (HBM), not the DDR RAM you’ll find in a PC or PlayStation. But these different chips are made from the same type of semiconductor wafers, and these wafers are increasingly in demand because HBM uses about three times as many of these wafers as DDR5 RAM.
They are also much more profitable to sell, and as a result, many companies are moving away from consumer memory chips and focusing on data center ones. So, for example, Micron, one of the Big Three memory makers alongside SK Hynix and Samsung Electronics, closed its long-standing consumer memory business, Crucial, “to improve supply and support to our larger strategic customers in faster-growing segments.” In other words, A.I.
While some manufacturers are changing focus, new capacity for other types of memory is not arriving fast enough to cover demand. So, for example, in October, SK Hynix announced that it “has already ensured full customer demand for all of its DRAM and NAND production for next year” and that it will have to increase its production to cope with market demands – but even the equipment to TO DO the price of chips is expected to increase.
In the short term, this means higher memory prices. Much higher prices. CNBC reports that RAM prices are expected to increase “more than 50% this quarter compared to the last quarter of 2025.” And the Bloomsbury Intelligence and Security Institute says that “DRAM prices have also jumped 171% year over year, outpacing gold, while DDR5 spot prices have quadrupled since September 2025. DRAM and NAND prices have doubled in a single month.”
Although capacity will be added to existing production plants and new plants will be built, this capacity is not expected to come online until 2027.
This will likely have two key impacts on the AV hardware market. The first is that we’ll see long-term price increases, particularly in the budget end of the market where manufacturers can’t just swallow the increased costs: there’s a lot less margin on a $300 smart TV than there is at $3,000.
The second is that manufacturers could go back to the drawing board, as some smartphone companies have done, by limiting the specifications of their next products to compensate for shortages and price increases. It could also persuade some companies to postpone their product plans altogether until market conditions are more favorable.
We’ve been here before, of course: I remember the completely fruitless search for stock AV receivers after chip production was halted during COVID lockdowns. At least this time we know the component crisis is coming and can plan purchases accordingly.
Our selections of the best audiovisual equipment in different categories
The best TVs for every budget
The best soundbars for every budget
The Best 4K Blu-ray Players for Every Budget
The best projectors for every budget
The best wireless headphones for every budget
The best noise-canceling headphones for every budget
The best Bluetooth speakers for every budget
The best music players for every budget
The best headphone DACs for every budget
Follow TechRadar on Google News And add us as your favorite source to get our news, reviews and expert opinions in your feeds. Make sure to click the Follow button!
And of course you can too follow TechRadar on TikTok for news, reviews, unboxings in video form and receive regular updates from us on WhatsApp Also.
