Price rises and memory shortages are likely to continue through 2027, a top semiconductor industry CEO told CNBC, adding to the view that the crunch that's been caused by the AI infrastructure boom may last longer than expected.
Memory chips are a key component of consumer electronics devices like smartphones and laptops. They have also become a critical part of artificial intelligence data centers and the servers that are installed in these facilities. In particular, there is significant demand for high-bandwidth memory.
As tens of billions of dollars continue to be spent on data center infrastructure, the demand for memory chips has gone through the roof, sparking an unprecedented price rise for the semiconductors, which is set to continue this year.
Sassine Ghazi, CEO of Synopsys , a key semiconductor design tool company, told CNBC in an interview last week that the chip "crunch" will continue through 2026 and 2027.
Ghazi said most of the memory from the top players "is going directly to AI infrastructure, but many other products need memory, so those other markets are starved today because there is no capacity left for them."
Samsung, SK Hynix, and Micron are the biggest memory companies in the world.
While these companies are aiming to expand manufacturing, it takes a "minimum" of two years before that comes online, which is one reason why the crunch is set to last, Ghazi said.