The global memory chip shortage is deepening in early 2026, as relentless AI-driven demand strains supply chains and begins to reshape market winners and losers.
In a research note released Friday, Oxford Economics warned that the ongoing shortage of memory chips is becoming increasingly damaging for global supply chains, particularly for manufacturers that rely on traditional DRAM and NAND chips, such as electronics producers, electrical machinery makers and automakers.
By contrast, memory chipmakers are seeing order books fully booked years in advance, with margins soaring.
The culprit, according to the firm, is insatiable AI-driven demand for advanced, high-margin memory chips — demand that is crowding out production of conventional components used in PCs, smartphones and consumer electronics.
AI Frenzy Ignites Memory Chip Shortage
"We expect the current supply–demand imbalance to persist over the next few years, as long as the AI investment boom continues," said Makoto Tsuchiya, senior economist at Oxford Economics.
"Firms are shifting production capacity towards higher-margin AI chips, leaving less capacity for traditional memory chips," he added.
As chipmakers race to meet record demand for high-bandwidth memory (HBM) chips — a key input for AI data centers — production capacity is shifting away from traditional memory products used in PCs, smartphones, cameras and consumer electronics.
That pivot is leaving downstream manufacturers squeezed by higher costs and limited supply.
Who's Hit Hardest — And Who's Thriving?
Oxford Economics estimates that memory chips account for 15%–18% of input costs for PCs and 9%–10% for smartphones, making price increases difficult to absorb.
Oxford's analysis flags electronics, electrical machinery, and carmakers as most exposed to the shortage, alongside IT services that depend heavily on devices powered by memory chips.
PC makers such as Dell Technologies Inc. (NYSE:DELL) have already raised prices by 15%–20%, with Lenovo expected to follow.
“Within the electronics sector, the polarization between AI and non-AI players will likely intensify,” Tsuchiya said.
"Memory chipmakers will benefit significantly from rising prices, while downstream manufacturers will face mounting input costs," he added.
According to TrendForce, prices for conventional DRAM jumped 45% to 50% in the fourth quarter of 2025. NAND prices rose 33% to 38% over the same period.
South Korean memory-chip giant SK Hynix reportedly sold out its entire 2026 production capacity months ago. While major chipmakers are investing in new facilities, ramping up takes years — and memories of past boom-bust cycles have made many firms hesitant to commit too aggressively.
Samsung estimated its operating profit tripled in the fourth quarter of 2025 from a year earlier, driven by rising memory prices.
Meanwhile, Chinese chipmakers, once expected to fill the void for traditional DRAM, are now also shifting to higher-end production as Beijing intensifies its AI ambitions.
That leaves a growing gap for consumer-focused memory products, and Oxford Economics warns the effects will ripple across other electronic components — from sensors and lenses to batteries — as production volumes fall.
7 Memory Chip Stocks Already Cashing In
Seven memory-related stocks have already posted triple-digit gains over the past year and extended gains into the start of 2026 as expectations for a prolonged shortage take hold.
- Sandisk Corp. (NASDAQ:SNDK): +1,100% (since February 2025), +75% year-to-date (YTD)
- Western Digital Corp. (NASDAQ:WDC): +242% (1-year), +29% YTD
- Seagate Technology Holdings plc (NASDAQ:STX): +240% (1-year), +16.3% YTD
- Micron Technology Inc. (NASDAQ:MU): +238% (1-year), +19% YTD
- Samsung Electronics Co. (OTC:SSNLF): +175% (1-year), +24% YTD
- SK Hynix Inc.: +262% (1-year), +16% YTD
- Winbond Electronics Corp.: +666% (1-year), +28% YTD
Oxford Economics sees little relief on the horizon. As long as AI investment remains strong, memory shortages are likely to persist, reinforcing a two-speed tech economy — one where memory chipmakers and AI infrastructure players thrive, while traditional electronics manufacturers struggle under rising costs.
Photo: YAKOBCHUK V on Shutterstock.com
