The rapid rise of AI technology is generating headlines about skyrocketing energy bills and potential power surges, largely driven by the spread of vast AI data centers across the country. However, AI isn’t just influencing your electricity costs—it could also impact the price of your next phone.
Recent reports highlight a growing concern: AI is fueling a significant chip shortage, and that shortage could drive up costs for the essential materials used in advanced devices. If current trends persist, consumers may soon see higher prices when shopping for smartphones and other electronics.
This situation echoes the post-2020 chip crunch triggered by Covid-related shutdowns, which disrupted global supply chains and sent prices for graphics cards and critical components soaring. Smartphone makers faced similar pressures, worrying about how rising costs might affect their products.
No Relief Ahead
Industry insiders say the price hikes might just be getting started. Both Samsung and Xiaomi are reportedly considering price increases for their upcoming models. According to a recent Hankyung report, Samsung points to the high memory demands of AI-driven features as a primary reason. While some AI tasks can be handled directly by the phone, many rely on powerful, cloud-based data centers for processing.
What’s driving the shortages? A surge in demand for servers equipped with high-bandwidth memory (HBM)—which is more expensive and complex to produce than traditional DRAM used in consumer devices. Manufacturers are shifting more resources toward making HBM, resulting in a supply squeeze and rising prices for vital memory chips in smartphones.
These increased costs are already trickling down to shoppers. Xiaomi told Reuters that “cost pressure has transferred to the pricing of our new products” and that the “rising costs of memory chips are far beyond expectations.” The same report warns that the trend may continue, potentially leading to even more price hikes on future phones.
