This Shift in Production Capacity Toward AI Data Centers Is Driving Up Costs Across Consumer Electronics, From Phones to Computers

Samsung has warned that the memory chip shortage will not ease next year and could actually worsen by 2027, with tight supply conditions potentially lasting until at least 2028. The Korean manufacturer attributes the prolonged crunch to surging demand from AI companies, which are already informing Samsung of their future memory needs. This shift in production capacity toward AI data centers is driving up costs across consumer electronics, from phones to computers. Samsung is prioritizing customers who sign long-term contracts, which allow the company to invest in production equipment without fearing sudden demand drops.

While orders from AI centers have pushed semiconductor sales to record levels, rising chip costs are squeezing profitability in smartphones and TVs. As the memory business grows, producing Samsung's own devices has become increasingly expensive and risky. The company has begun passing some of the increased component costs onto Galaxy phone and tablet prices, but the hikes have weakened device demand.

The same crisis has led Apple to raise prices on MacBooks, Macs, and iPads. With manufacturers shifting capacity from consumer electronics to AI data centers, new price increases are looming across a wide range of products, from graphics cards to game consoles. Nvidia is reportedly considering a 20-30% price hike on its consumer graphics cards.