There is little doubt that AI has changed the digital landscape. It has become so prevalent that many companies across the globe have implemented it in their daily processes.
But this trend has come at a cost. Because of the demands AI implementation has on processing power, the price of DRAMs, NANDs and other DDR5 modules has seen a spike of over 170% over the last few years.
The increase is staggering and it’s left many companies in the lurch, fighting to pay for components that they need in a market where demand is higher than it’s ever been.
General Impact
The truth is that AI gobbles up a lot of memory. This means more sophisticated processing units are required to keep AI-powered services like ChatGPT running, which in turn has driven up the price.
Industry executives have spoken out about this “memory crunch”, stating that this wave could impact end-users.
Dell’s COO, Jeff Clarke, has echoed this sentiment, going as far as claiming this demand has a “chokehold” on the supply chain of such components.
Lenovo, too, has been affected. They have recently announced that their entire product range, from basic laptops to sophisticated gaming machines, will experience a price hike of between 15-25% in 2026.
Critical Factors
It has hardly escaped anyone’s notice that everything seems more expensive nowadays. Numerous factors have driven inflation on global economies, meaning we’re all feeling the pinch.
But this alone cannot explain the memory crunch. While AI is most definitely the biggest cause, there are others that some might have overlooked:
- Technology Transition: There has been a transition in recent years to more advanced memory types to accommodate more complex processes
- Data Centres: AI training takes a lot of electricity due to the high-memory demands, which in turn strains data server capacity
- Bottleneck Market: A few major companies hold a share of the market, making choices limited
- Changing Trends: The shift to more sophisticated memory types adds to production types and complexities
End-User Impact
Long story short, consumers might have to tighten their belts over the coming months.
While they might have no intention of investing in an AI-ready machine, this memory crunch will impact every device on the market, such as smartphones and notebooks.
This is already driving them to turn to the second-hand market, with many businesses trading used PC parts finding an unexpected boom.
To summarise, the AI boom has driven a huge increase in price due to the demands AI engines require, with far-reaching consequences.
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