AI-Driven HBM Demand Reshapes Global Memory Market, Pushing Consumer Electronics Prices Higher
Surging demand for High Bandwidth Memory from AI data centers is consuming advanced storage capacity and driving up component costs. Major manufacturers are prioritizing HBM production, leading to supply shortages that have forced companies like Apple, Lenovo, and Dell to raise consumer electronics prices.
The global memory chip market is undergoing a structural shift as artificial intelligence drives unprecedented demand for High Bandwidth Memory (HBM), squeezing the supply of components used in everyday consumer electronics.
Approximately 70% of global advanced storage capacity is currently consumed by AI data centers. Producing 1GB of HBM requires wafer capacity equivalent to producing roughly 3GB of general-purpose memory, meaning the pivot toward AI chips directly constrains the availability of standard DRAM and NAND flash used in smartphones and laptops. Investment banks estimate that the supply-demand gap for various storage chips exceeded 4% this year, reaching a decade-high.
This imbalance has triggered sharp price increases across the industry. In the first half of this year, contract prices for general-purpose memory nearly doubled, while flash memory prices rose by more than 50%. The procurement price for a single 12GB mobile memory chip climbed from 200 yuan to nearly 600 yuan, and a 1TB flash chip rose from just over 200 yuan to 600 yuan. Consequently, storage chips now account for over 30% of the total material cost of a smartphone, up from 10-15% previously, with some flagship models approaching 50%. Apple, Lenovo, and Dell have raised prices on their products due to these storage chip shortages, and Apple described the current supply-demand tension as a "once-in-a-century flood."
Memory manufacturers are reaping significant financial rewards from the shift. Samsung Electronics' quarterly operating profit increased by 18 times. SK Hynix raised $26.5 billion through an American Depositary Shares (ADS) issuance, marking the largest IPO by a foreign company in the US.
The HBM market itself is expanding rapidly, with its global size expected to exceed $60 billion by 2026. Both SK Hynix and Micron announced that their 2026 HBM production capacity is fully sold out, with customers already locking in supply for 2027 and 2028. According to DigiTimes, the unit price of next-generation HBM4 will be approximately $2/GB in the second half of 2026, rising to $4-$5/GB or higher in 2027. JPMorgan predicts the global average selling price of HBM will rise by 54% year-on-year in 2027 and another 25% in 2028.
To address capacity constraints, Samsung, SK Hynix, and Micron's combined capital expenditure for 2026 exceeds $50 billion, with Samsung alone investing over 110 trillion won. However, much of this new capacity is dedicated to HBM production, potentially leaving consumer memory prices elevated long-term as the semiconductor industry cycle becomes increasingly driven by AI infrastructure rather than traditional consumer upgrades.