Tech firms from Dell to HP warn of memory chip squeeze from AI

"Dell Technologies Inc., HP Inc. and other tech companies are warning of potential memory-chip supply shortages in the coming year due to soaring demand from the buildout of artificial intelligence infrastructure. Consumer electronics makers including Xiaomi Corp. have sounded the alarm about potential price increases, while others including Lenovo Group Ltd. have begun stockpiling memory chips in anticipation of rising costs. Counterpoint Research this month forecast a 50% price rise for memory modules through the second quarter of next year."

"A shortage would threaten to increase the costs of manufacturing everything from phones to medical equipment and cars. Such chips are used in virtually every modern electronic device that stores data. The AI boom is indirectly to blame. There are two types of memory chips, ones that help with processing and ones that store information. Manufacturers are allocating more production to meet demand for new, more complex and profitable products used in AI systems, causing a shortage of more common types of memory."

"Dell has never seen costs move at the rate that they are now, Chief Operating Officer Jeff Clarke said on a call with analysts on Tuesday. The company has seen tighter supplies of dynamic random access memory, DRAM for short which includes high-bandwidth memory for AI to the chips powering personal computers as well as of hard drives and so-called NAND flash memory, he said."

Potential memory-chip shortages are expected next year as manufacturers shift capacity toward high-margin, high-bandwidth memory for AI infrastructure. Consumer electronics makers face possible price increases and some firms are stockpiling memory chips in anticipation of rising costs. Counterpoint Research forecasts a 50% price rise for memory modules through the second quarter of next year. Shortages would raise manufacturing costs for phones, medical equipment and cars because DRAM and NAND flash are central to modern electronics. US sanctions limiting Chinese entrants and rapid cost inflation across DRAM, hard drives and NAND are intensifying supply pressures.

Read at www.mercurynews.com