Hadlee Simons / Android Authority
TL;DR The demand for AI is fueling a shortage in memory chips for smartphones.
The shortage is causing the price of memory chips to skyrocket.
Samsung is reportedly considering raising its smartphone prices due to the increased costs.
If you’re looking to buy a new phone in the near future, you might want to make that purchase sooner rather than later. Samsung may raise its prices soon, and it seems there’s a good chance that other manufacturers will follow suit. Why might your next phone cost you more? The reason is related to the AI boom and memory.
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According to a report from Hankyung, Samsung is considering raising the prices of its products, including its smartphones. How big of an increase we’re looking at is unclear. But it appears that the price bump could impact the brand’s low- and mid-tier phones. The company is reportedly discussing potential price hikes due to the current memory shortage.
Why is there a memory shortage, and what does it have to do with the AI boom? While some AI features run on-device, like Circle to Search and Magic Eraser, more intensive features tend to lean on the cloud. This requires server farms with a large amount of high-bandwidth memory (HBM). As companies like Google and Microsoft double down on AI, the demand for server farms has sharply increased.
Although HBM isn’t used in products like smartphones, it is having an effect on the production of memory chips that are used for consumer products. As the report points out, it’s more lucrative for memory chip makers to focus on HBM, as it’s more than five times more profitable than standard DRAM modules. As a result, fewer resources are being put toward the manufacturing of DRAM. Couple that with the increase in AI phones that require more memory to run AI tasks. All of these factors have led to memory suppliers running low on inventory, which is causing an increase in prices.
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