The Memory Chip Crunch Will Last Until 2027

Your next smartphone will cost significantly more than your current one. The AI data center construction boom has completely transformed the memory chip market, and there's no quick fix in sight.

Sassine Ghazi, CEO of semiconductor design software firm Synopsys, told CNBC that the current memory chip "crunch" will persist through 2026 and 2027. This isn't just a temporary supply hiccup—it's a fundamental shift in how the industry operates.

AI Is Hoarding All the Memory

The core issue is a dramatic shift in priorities. Most memory chips produced by the world's top three manufacturers—Samsung, SK Hynix, and Micron—are flowing directly into AI infrastructure. The explosive demand for high-bandwidth memory (HBM) means that consumer electronics like smartphones and laptops are being "starved," as Ghazi puts it.

Lenovo's CFO Winston Cheng echoed this sentiment, stating "we will see memory prices going up" due to high demand and insufficient supply. When the world's largest PC maker's chief financial officer makes such a definitive statement, it's time to pay attention.

Memory prices have historically followed cycles of oversupply and shortage. But industry experts are calling the current situation a "super cycle"—a structural change that's fundamentally different from past fluctuations.

Consumer Price Hikes Are Already Here

Chinese smartphone giant Xiaomi predicted last year that mobile phone price increases would hit in 2026. But Synopsys' Ghazi says price hikes are "happening already." Reality is moving faster than predictions.

Lenovo's Cheng expressed confidence that his company can "pass on the cost" to consumers, citing the firm's diversified global supply chain with 30 manufacturing plants worldwide as a risk mitigation factor.

However, the impact won't be evenly distributed. Price increases will "start hitting the lower end" of the electronics market first, experts warn. Budget devices with thinner margins will feel the squeeze more acutely than premium products.

The Two-Year Problem

So when might relief come? Memory companies are expanding manufacturing capacity, but new production lines take a "minimum of two years" to come online, Ghazi explained. The physics of semiconductor manufacturing make rapid supply increases impossible.

Meanwhile, Microsoft's Windows 11 upgrade cycle is adding fuel to PC demand. The 2021-launched operating system is creating a "very real replacement cycle," according to Cheng, putting additional pressure on memory supplies.

The Golden Age of Memory Companies

"Now it's a golden time for the memory companies," Ghazi observed. The three major players are experiencing unprecedented demand and pricing power. But this golden age for suppliers translates directly into higher costs for everyone else down the supply chain.

The situation reveals how AI infrastructure development has created an entirely new tier of demand that takes priority over traditional consumer electronics. Data centers building AI capabilities are willing to pay premium prices for memory, effectively pricing out other applications.