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The artificial intelligence craze is not only driving up chip prices but also creating a new crisis in the memory market. While large tech corporations can raise product prices to offset costs, many small businesses are facing the risk of running out of components to continue production.
Last week, both Apple and Microsoft simultaneously raised prices on several of their flagship products in an attempt to pass some of the sharply increased memory costs on to consumers. However, for small electronics businesses, this option is almost unfeasible.
According to research firm IDC, many memory suppliers are now prioritizing supplies for large customers, making it difficult for small and medium-sized businesses to access components and causing them to face soaring costs.
In fact, GoPro warned that memory prices rising by 80 to 115% could put the company at risk of ceasing operations. Meanwhile, Sonos is also facing significant pressure on its profits.
Conversely, memory manufacturers benefited. Micron reported a more than fourfold increase in revenue in the most recent quarter, with the average selling price of DRAM memory rising by over 260% year-on-year. The company confirmed it had signed long-term supply agreements with several major customers in the smartphone and computer sectors.