Topline
A range of tech products—like the Nintendo Switch 2 to Samsung Galaxy phones—suddenly cost a lot more money, and the booming AI industry is largely to blame, as the surge in demand for memory chips for AI data centers has put a serious strain on the supply left for consumer products.
Nintendo hiked the price of its flagship Switch 2 console last week. (Photo by DIMITAR DILKOFF/AFP via Getty Images)
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Key Facts
Nintendo is the latest gaming company to hike the price of its flagship console, warning frustrated consumers the price of the Switch 2 will rise $50 in the United States in September, which comes just weeks after major competitor Sony hiked the cost of its PlayStation consoles.
Nintendo’s price hike announcement vaguely cited “market conditions,” but in an earnings release on Friday, the Japanese gaming company forecast a decline in profit for fiscal year 2027, citing “higher prices for components such as memory” among other factors.
The cost of memory chips has surged in recent months—doubling in the first quarter of 2026, Reuters reported—as the enormous demand from AI data centers has constrained supply for consumer products.
Sassine Ghazi, CEO of Synopsys, a semiconductor company, said much of the memory chip supply is “going directly to AI infrastructure, but many other products need memory,” which has left other industries “starved.”
Polygon, a video game news outlet, previously reported major memory chip manufacturers are incentivized to sell products to AI data centers because they can make a lot more money than if they sold memory hardware for use in consumer products.
Ghazi said memory chip companies are working to expand their manufacturing capabilities, but suggested it could take a minimum of two years for the increase in production to offset the shortage.
What Products Are Suddenly More Expensive?
Prices for most major video game consoles—Nintendo’s Switch 2, Sony’s PlayStation and Microsoft’s Xbox—have all gone up within the last eight months, with the Switch and PlayStation both announcing hikes within the last six weeks. Sony’s latest PlayStation price increase raised the cost for each version of its flagship console by $100 or $150, marking the second price hike in one year as President Donald Trump’s tariffs previously put pressure on its supply chain. Computers have also been impacted, with Microsoft announcing a huge increase for its Surface line of laptops and tablets in April. The Surface Pro 13-inch laptop now starts at $1,499, Microsoft announced—a $500 increase over the $999 it cost at launch. Apple discontinued the cheapest version of its Mac Mini desktop computer, which contained 256GB of storage and cost $599, earlier this month, leaving the 512GB version that costs $799 as the cheapest option. The discontinuation followed outgoing Apple CEO Tim Cook’s warning in an April earnings call that the “majority of our supply constraints will be on several Mac models” as the company expects “significantly higher memory costs” amid the memory shortage. Meta also hiked the prices of its Quest headset models by $50 to $100 in April, saying the “cost of building high-performance VR hardware has risen significantly,” specifically citing memory chips.
How Long Could The Memory Chip Shortage Last?
The shortage is expected to last through at least 2027, but it could last for years, according to some projections. A Samsung executive warned on an earnings call in April the memory crisis could actually worsen in 2027, suggesting the “supply-to-demand gap for 2027 is set to widen even further than in 2026.” Chey Tae-won, the South Korean billionaire and chairman of SK Group, a conglomerate that owns semiconductor producer SK Hynix, offered a more dire warning in March, suggesting the shortage could actually last up to five more years. Chey said memory hardware producers like SK Hynix are working to increase manufacturing, but said it could take until 2030 until production capabilities are able to meet demand.
Tangent
Major tech companies have announced in recent months they will boost spending on AI infrastructure as they struggle with rising memory chip costs. On an earnings call in April, Meta CFO Susan Li said the company is “investing aggressively to meet our infrastructure needs,” including “striking deals throughout the supply chain to secure necessary components for future capacity.” Reuters reported last week some major tech companies are making offers to chipmaker SK Hynix to invest in its chip production lines to secure supplies, offers it says are “unprecedented in the global memory chip industry.”
Further Reading
RAM price hikes: the latest on the global memory shortage (The Verge)
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