April 13, 2026, 8:03 am | Read time: 3 minutes
Prices for memory chips are rising rapidly, impacting affordable electronics like routers, streaming sticks, and smartphones. In an interview, the CEO of Taiwanese semiconductor company Phison warns that entire production lines could shut down.
What Consequences Do Manufacturers Face?
CEO Pua Khein-Seng explained in an interview with the YouTube channel 年代向錢看 from Taiwanese broadcaster Era Television that the AI industry’s demand for memory chips is consuming almost the entire global production capacity. This drives prices to historic highs—many manufacturers may have to halt their product lines or even file for bankruptcy.
A user summarized the interview in a post on X (formerly Twitter). According to the summary, Pua said: “Many system providers will go bankrupt or abandon product lines by the end of 2026 due to a lack of memory.” Smartphones are particularly affected, with production potentially dropping by 200 to 250 million units. PC and TV manufacturers are also likely to experience production declines.
The AI industry plays a central role in this. Nvidia’s AI-optimized computing platform, Vera Rubin, requires more than 20 terabytes of SSD storage—per unit. If the company achieves its planned sales in the tens of millions, this alone could consume about 20 percent of global memory production.
Memory manufacturers are now demanding advance payments of up to three years to secure supply. Pua expects the crisis to last until 2030 or longer. Extremely pessimistic estimates predict a duration of up to ten years.
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Initial Impacts on Consumer Products
The shortage primarily affects manufacturers of affordable electronics. This includes streaming boxes like Amazon’s Fire TV Stick, Roku, or generic products, Wi-Fi routers, smart home devices, budget surveillance cameras, smart plugs, and robotic vacuums. Affordable smartphones and smart TVs could also see a production drop of 200 to 250 million units.
Manufacturers are passing the higher component prices on to customers. A spokesperson for Fritz! (formerly AVM) confirms: “The current price trend for memory components has been noticeable for several months and has already been factored into our prices.” Market researchers expect smartphone costs to rise by 6 to 8 percent. For consumers, this means higher prices, less choice, and longer product cycles.
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Potential Benefits of the Memory Crisis
Despite the negative effects, the crisis could have a positive impact: Products might last longer and be more likely to be repaired. Cheap, short-lived devices of poor quality could disappear from the market. This could reduce bad purchases and improve customer service. However, production is shifting from consumer devices to massive AI servers, whose energy consumption is enormous. Whether this is environmentally friendly in the long term remains questionable.