Memory chips are the new shortage: AI data centers are pulling DRAM away from cars, medical devices and PCs
Contract DRAM prices nearly doubled in early 2026 and kept climbing, and September's ISM survey lists memory, circuit boards and electronic components as short. Industries from autos to medical devices have asked Washington for help.
Article summary
- Why it matters: Memory is in almost everything with a circuit board, and AI data centers are outbidding everyone else for it. For procurement teams buying electronics, equipment with embedded controls, vehicles, medical devices or IT hardware, that means higher prices, allocation and longer lead times, often from suppliers who can’t fully explain why.
- What to do first: Find memory in your bill of materials. Ask equipment and electronics suppliers which products depend on DRAM or NAND and how much of their cost it represents.
- Buy IT hardware early. Pull forward 2027 PC and server refreshes where budgets allow, and lock pricing for a set period.
- 90–95%
- rise in conventional DRAM contract prices, Q1 2026 (TrendForce forecast)
- 58–63%
- expected DRAM contract price rise in Q2 2026
- 70–75%
- expected NAND flash contract price rise in Q2 2026
- 36.3 GW
- projected U.S. data center capacity additions in 2027 (Goldman Sachs)
On this page
The details
The cause. Goldman Sachs expects U.S. data center capacity additions to rise from 6.4 gigawatts in 2024 to 13.6 GW in 2026 and 36.3 GW in 2027. That demand, including high-bandwidth memory for AI accelerators, is shifting DRAM wafer capacity toward AI servers and away from standard memory chips.
The prices. Research firm TrendForce expected conventional DRAM contract prices to rise 90% to 95% quarter over quarter in the first quarter of 2026, with PC DRAM at least doubling. For the second quarter, it expected another 58% to 63% for DRAM and 70% to 75% for NAND flash contract prices.
Who’s affected. Automakers, retailers, electronics companies and telecom groups have said the shortage is raising costs and threatening supply, according to Reuters. A coalition including NCTA, ACA Connects, the Medical Device Manufacturers Association and the Alliance for Automotive Innovation wrote to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick about “an urgent imbalance in the market for memory chips.”
Still short in September. The Institute for Supply Management’s September survey listed electrical and electronic components, memory products, printed circuit boards and several steel products as in short supply, with semiconductors among commodities rising in price.
What device makers are saying. In early 2026, PC makers including Lenovo, Dell, HP, Acer and Asus warned of 15% to 20% price increases from the second half of 2026, according to TechRadar. Research firm IDC modeled scenarios in which the smartphone market could shrink as much as 5.2% and the PC market 8.9% in 2026, noting memory makes up about 10% to 20% of a smartphone’s build cost. PCs face extra pressure because newer AI PCs require at least 16 GB of memory. “The severity and duration of the shortage will be determined by how quickly production capacity can expand,” IDC’s Francisco Jeronimo said.
How long it could last. Industry commentary cited by TechRadar suggested the shortage could persist well into 2027, because memory makers are prioritizing higher-margin AI data center products and new fabrication capacity takes years to build.
How big the market is. The global DRAM market is expected to pass $100 billion this year, according to IBM, which invented DRAM in 1966, as cited by Supply Chain Connect. The coalition’s letter warned of “significant, sustained near-term price increases” for U.S. households and said the effects on prices, telecom infrastructure costs and the production of cars and medical devices had already begun and could worsen quickly. The groups said they recognize AI’s importance to U.S. technology leadership but that other industries must not be harmed by the disruption.
Where the shortage reaches you
| What you buy | How memory shows up | Risk |
|---|---|---|
| Laptops, desktops, servers | DRAM and SSD storage | Price increases and configuration changes |
| Industrial equipment and controls | Embedded memory on boards | Longer lead times, redesigns |
| Vehicles and fleet | Automotive-grade memory | Delivery delays |
| Medical devices | Qualified components | Limited ability to substitute |
| Telecom and network gear | Memory-heavy hardware | Higher infrastructure costs |
This mapping is our assessment.
How much memory can add to what you pay
Memory’s share of a product’s cost decides how much a memory price spike flows through. IDC puts memory at about 10% to 20% of a smartphone’s build cost. The table shows how a device’s build cost changes when memory prices rise and every other cost stays the same:
| Memory share of build cost | Memory price up 50% | Memory price doubles |
|---|---|---|
| 10% | +5% | +10% |
| 15% | +7.5% | +15% |
| 20% | +10% | +20% |
These are our calculations, before any supplier margin or absorption. They line up with the 15% to 20% price increases PC makers warned of for the second half of 2026. For industrial equipment, where memory is a small part of a large machine, the price effect is smaller but the lead-time effect can be just as serious: one missing chip holds up a finished product.
Why price alone won’t tell you the risk. In a shortage, memory makers decide who gets supply. Large buyers with long-term agreements and AI server customers come first. Mid-sized equipment makers and contract manufacturers are more likely to face allocation, which then shows up for you as a missed ship date rather than a higher quote.
Questions to ask your electronics and equipment suppliers
- Which of the products we buy contain DRAM or NAND flash, and roughly what share of your cost is memory?
- Are you on allocation from your memory suppliers, and for how many quarters is your supply confirmed?
- Which memory parts are single-sourced, and have you qualified alternates?
- How are memory cost changes reflected in your price, and will you show the index or supplier quote behind any increase?
- If supply tightens further, how will you allocate finished goods across customers?
What procurement teams should do
- Find memory in your bill of materials. Ask equipment and electronics suppliers which products depend on DRAM or NAND and how much of their cost it represents.
- Buy IT hardware early. Pull forward 2027 PC and server refreshes where budgets allow, and lock pricing for a set period.
- Accept equivalent configurations. Allow approved alternates for memory size or brand to keep orders moving.
- Ask for allocation commitments. Get suppliers to confirm quantities and dates in writing for critical items.
- Separate memory from tariffs. Section 232 duties on some semiconductors are a different cost driver; ask suppliers to itemize each.
Planning 2027 budgets
For IT hardware, plan on PC and server prices staying above early-2026 levels through 2027, based on the device makers’ warnings and the commentary that the shortage could run into 2027. For equipment with embedded electronics, add lead-time buffer to project plans rather than relying on quoted dates. And for any product where memory is a large share of cost, ask for pricing that moves with a memory benchmark in both directions, so you share in the decline when new capacity arrives. This is our guidance.
What to watch next
- Quarterly contract price reports from memory market trackers.
- New memory capacity coming online, which takes years to build.
- Government response to the industry coalition’s letter.
The bigger picture
AI infrastructure is now competing with the rest of the economy for chips, power, steel and skilled labor. Procurement teams should treat AI-driven demand as a structural factor in electronics, metals and energy categories, not a temporary spike. Our Cost Pressure Monitor tracks broad U.S. producer prices for semiconductors, which were down 3.1% on the year through August even as memory prices surged, a sign of how concentrated the shortage is.
Questions procurement teams are asking
Why are memory chip prices rising in 2026?
Demand from AI data centers, including high-bandwidth memory for AI accelerators, is shifting DRAM wafer capacity toward AI servers and away from standard memory, according to Goldman Sachs.
Which industries are affected by the memory shortage?
Automakers, smartphone and consumer electronics makers, medical device manufacturers and telecom equipment providers have reported higher costs and supply risk. A cross-industry coalition wrote to the Treasury and Commerce secretaries about it.
Why are memory prices rising when the semiconductor price index is down?
The U.S. producer price index for semiconductors covers a broad range of chips and was down 3.1% on the year through August. The shortage is concentrated in memory, where AI data center demand is pulling DRAM wafer capacity away from standard chips.
How much can a memory price increase add to the cost of a device?
It depends on memory's share of the build cost. By our calculation, if memory is 15% of a device's cost and memory prices double, the build cost rises about 15% before any supplier margin, in line with the 15% to 20% increases PC makers warned of.
How we reported this
This signal report draws on 3 sources, listed below, and reflects figures as reported on October 2, 2026. The sections on why it matters and what procurement teams should do are Procurement Signal analysis. It is not legal or financial advice. See our editorial standards.
