An LED lights up on a server rack in a data center.
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Rising prices and memory shortages are likely to continue into 2027, a top semiconductor industry CEO told CNBC, adding that the crisis caused by the AI infrastructure boom could last longer than expected.
Memory chips are important components of consumer electronics such as smartphones and laptops. It has also become an important part of artificial intelligence data centers and the servers installed in these facilities. In particular, there is a huge demand for high bandwidth memory.
As tens of billions of dollars continue to be spent on data center infrastructure, demand for memory chips has skyrocketed, driving unprecedented semiconductor prices, a trend that is expected to continue this year.
Mr. Sashin Ghazi, CEO synopsisThe leading semiconductor design tools company said in an interview with CNBC last week that the “demand deficit” for chips will continue through 2026 and 2027.
Ghazi said most of the top players’ memory “goes directly to the AI infrastructure, but many other products require memory, so those other markets are starving today with no capacity left to accommodate them.”
Samsung, SK Hynix, micron is the world’s largest memory company.
These companies are looking to expand their manufacturing operations, but it will take “at least” two years to get them up and running, which is one reason the demand crisis is lasting, Ghazi said.
Sashin Ghazi, CEO of semiconductor design software company Synopsys, explained the company’s plans to let artificial intelligence take over some of the design of computer chips at the company’s annual user conference in Santa Clara, California, on March 19, 2025.
Stephen Nellis | Reuters
Memory prices have historically traded in cycles of shortages and oversupply, which have determined component prices. However, some analysts are calling the current trend a “supercycle.”
“This is a golden age for memory companies,” Ghazi said.
Winston Chen, chief financial officer of Lenovo, the world’s largest computer maker, also said in an interview last week that while demand is high, there is not enough supply. “Memory prices will go up,” he said.
Prices will rise in the future
Rising memory prices mean consumer electronics manufacturers may have to consider raising prices.
Chinese home appliance major xiaomiThe company, one of the world’s largest smartphone companies, said last year that it expected the price of its phones to rise in 2026. But Synopsys’ Ghazi said price increases are “already happening.”
Lenovo’s Chen said that because of high demand for memory chips, “we’re very confident that we’ll be in a cycle where we can pass on costs.”
Lenovo has a global “diversified” supply chain with 30 manufacturing plants around the world, which could help mitigate some of the risks related to memory shortages, Chen said.
But he noted that the consumer devices sector is also “taking a bit of a hit on the price demand side.” He added that PC and laptop users are still upgrading to Windows 11. microsoftoperating system released in 2021.
“I think the rotation cycle is very realistic,” Chen said. Nevertheless, price increases will “start to affect the lower tiers” of the electronics market first.
