Samsung

The technology that surrounds us – in our pockets, homes, and workplaces – relies on chips as fundamental building blocks. And the world is facing a critical shortage of one key component: RAM, or Random Access Memory. Experts are calling this escalating crisis “RAMageddon,” a situation driven by the insatiable demand from artificial intelligence (AI) companies who are prioritizing production for data centers over other sectors. This scarcity is poised to impact the cost of everything from smartphones to cars and computers.

The price of memory RAM has surged in recent months, with some types increasing in cost by as much as sixfold, according to recent reports. This isn’t just a concern for tech enthusiasts; the ripple effects are expected to extend to the manufacturing of numerous components, including hard drives, graphics cards, and processors – the “brains” of countless devices. The looming price increases are prompting concerns across the tech industry and for consumers.

The core of the problem lies with a concentrated market. Micron, SK Hynix, and Samsung control approximately 95% of the global DRAM supply, and are currently prioritizing lucrative contracts with AI developers, according to Tom’s Guide. This shift in focus is leaving other manufacturers scrambling for limited resources.

Impact on Consumer Electronics

The impact on consumers will be tangible. IDC estimates that memory accounts for 15-20% of the material cost of a mid-range smartphone. This translates to a potential price increase of over $400 for a $500 phone, bringing the total cost to over $2,200, as reported by sources in the industry. Apple, for example, is reportedly preparing to pay 80-100% more for memory this quarter after renegotiating with Samsung and SK Hynix, according to The Times.

The gaming industry is also bracing for impact. Bloomberg reports that the launch of the Nintendo Switch 2 could be accompanied by a significant price increase, while the PlayStation 6 from Sony may be delayed until 2028 or 2029 due to RAM shortages. Manufacturers of desktop and laptop computers, including Lenovo, Dell, HP, Asus, and Acer, are anticipating price increases of 10-30% in the near term.

Long-Term Outlook and Supply Constraints

The situation isn’t expected to improve quickly. Building new manufacturing plants takes time, and current projections suggest limited relief in the short term. Intel CEO Lip-Bu Tan stated in February that “there will be no relief until 2028,” as reported by Bloomberg. Micron has confirmed that its new factory in Idaho won’t be fully operational until mid-2027, with “real production” expected in 2028.

Samsung plans a modest 5% increase in wafer supply this year, but this is unlikely to significantly alleviate the shortage. The impact will be felt globally, but particularly in large-scale contracts for computers and servers used by governments and corporations.

Colombia’s Response

In Colombia, the impact will be felt, particularly in large government and corporate contracts for computers and servers. Alberto Samuel Yohai, president of the Colombian Chamber of Informatics and Telecommunications (CCIT), emphasized the need for collaboration between public entities and suppliers to develop action plans that address these challenges within the framework of force majeure situations. This includes adjusting purchase specifications based on current inventory and aligning bidding processes with available RAM types.

What comes next will depend on the speed at which new manufacturing capacity comes online and the evolving demands of the AI sector. The current situation underscores the fragility of global supply chains and the critical importance of diversifying production sources. Consumers and businesses alike should prepare for continued price volatility in the technology market.

What are your thoughts on the RAMageddon? Share your concerns and experiences in the comments below.