Chip shortage may affect gadget prices

Global demand for smartphones, personal computers and gaming consoles is expected to shrink this year as companies from Britain’s Raspberry Pi to HP Inc raise sticker prices to offset surging memory chip costs.

- JASPREET SINGH ZAHEER KACHWALA

Micron memory chips on a printed circuit board in 2017. A shortage of the chips affects low- and mid-range device makers the most.

(REUTERS)

The rapid build-out of artificial intelligence infrastructure by US tech firms such as OpenAI, Alphabet-owned Google and Microsoft has absorbed much of the world’s memory chip supply, pushing up prices as manufacturers prioritise components for higher-margin data centres over consumer devices.

Samsung, SK Hynix and Micron, the world's three largest producers of memory chips, have said in recent months that they were struggling to keep up with demand as they reported rosy quarterly earnings on the back of surging prices for their semiconductors.

But the price surge is rippling through consumer markets.

Research firms IDC and Counterpoint both now expect global smartphone sales to shrink at least 2% this year, in a sharp reversal from their growth outlook a few months ago. That would mark the first annual decline in shipments since 2023.