A computer shop in China. Reuters.
AI is causing a crisis in consumer RAM prices as AI demand is sucking up a huge amount of production. Reuters. The price spike is affecting all kinds of memory, but DRAM is the most effected. The shortage could cause major problems, not only for consumer electronics, but for AI data centers themselves. Inventory of chips has been greatly reduced and there are fears that the higher prices could cause the AI bubble to pop. The prices of many consumer electronics will jump as well, with lower end smartphones, PC's and video game consoles bearing the brunt of the costs.
My Comment:
Outside of the tech world this story has been largely ignored. But folks who are going to try and buy a new PC or video game console are likely to see a major sticker shock in a month or two. This is a major crisis and it has echoes of the GPU crisis when crypto mining became a huge thing. That bubble eventually burst but it was a very bad time to be a PC gamer. It looks like we are going to see something similar here, but the fallout could be far beyond just gaming this time around. In short, if you are on the fence about buying/building a new PC, video game console, or lower spec smartphone, you should absolutely have done it a month ago, and failing that, you should do it now.
AI is, of course, causing the bulk of this issue. Chip companies know that they can make more profit off of the data centers that are going up than they can from PC gamers and other consumers so they are logically making the choice to do so. These data centers are used for the various LLM's like ChatGPT and Grok and they require advanced chips. So it's no surprise that these companies are focusing on that.
It's very bad news especially for video games and the people that buy and produce them. It sounds like Xbox is going to increase prices for their consoles and if you were thinking about building a PC, expect to pay $200 or $300 for RAM alone. GPU prices are stable but the costs of SSD hard drives are getting more expensive as well. In short, it's a terrible time to try and build a PC or buy a console.
It's also a bad time for companies to release new consoles as well. I know the Steam Machine is supposedly coming out next year and there is a good chance that might not be in the cards anymore depending on how Valve planned things. If they got a large stockpile of DRAM sitting around awaiting the launch they could be able to put it out at a fair price. But if they didn't they are going to have to price the thing as much as a full PC costs pre-spike, which means it's almost certain to fail. And that's just one example, a lot of tech companies are going to face difficult decisions as this crisis continues.
For me personally, I should not be affected too greatly. My gaming PC is future proof for at least a couple of years, I already have 32 gigs of RAM, which should last through the crisis as production is supposed to increase in 2027. I also just bought a new laptop to replace my dying gaming laptop. It's not high end or anything but it's crazy to think that the 16 gigs of ram it has is now worth more than half of what I paid for it. My phone is new this year as well, so at the very least, I should be able to weather this storm, assuming none of my components burn out or some other disaster befalls me.
I do wonder how long this AI craze is going to last. I use LLM's myself, as Grok came free with my blue check subscription. It's certainly a useful tool. It's great at collecting information and bouncing ideas off of it, but I still don't really understand how anyone is supposed to make money off of it. I do think that sooner or later the AI bubble is going to burst, all bubbles do, when the hype doesn't quite match the results. But until that happens anything involving tech is probably going to be very expensive.
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