The memory shortage is causing a repricing of consumer electronics

<p><strong><a href="https://davidoks.blog/p/ai-is-killing-the-cheap-smartphone">The memory shortage is causing a repricing of consumer electronics</a></strong></p> David Oks provides the clearest explanation I've seen yet of why consumer products that use memory are likely to get significantly more expensive over the next few years.</p> <p>The short version is that memory manufacturers - of which there are just three remaining large companies - have a fixed capacity in terms of how many wafers they can process at any one time. This fixed wafer capacity is then split between DDR - used in desktops and servers, LPDDR - used in mobile phones and low-energy devices, and HBM - used with GPUs.</p> <p>Until recently, HBM got just 2% of that wafer allocation. The enormous growth in AI data centers has pushed that up to an expected 20% by the end of 2026, and "a single gigabyte of HBM consumes more than three times the wafer capacity that a gigabyte of DDR or LPDDR does".</p> <p>Memory companies have learned from the extinction of their rivals that you should always under-provision rather than over-provision your fabricator capacity. The profit margins and demand for HBM (high-bandwidth memory) will constrain the production of consumer-device RAM for several years.</p> <p>This is already being felt in the sub-$100 smartphone market, which is particularly important to markets like Africa and South Asia.</p> <p>(The original title of the piece was "AI is killing the cheap smartphone" but I'm using the Hacker News rephrased title, which I think does more justice to the content.) <p><small></small>Via <a href="https://news.ycombinator.com/item?id=48229319">Hacker News</a></small></p> <p>Tags: <a href="https://simonwillison.net/tags/memory">memory</a>, <a href="https://simonwillison.net/tags/ai">ai</a>, <a href="https://simonwillison.net/tags/ai-ethics">ai-ethics</a></p>