Memory chip shortage to last through 2027, semiconductor boss says

Price rises and memory shortages are likely to continue through 2027, a top semiconductor industry CEO told CNBC, adding to the view that the crunch that’s been caused by the AI infrastructure boom may last longer than expected.

Memory chips are a key component of consumer electronics devices like smartphones and laptops. They have also become a critical part of artificial intelligence data centers and the servers that are installed in these facilities. In particular, there is significant demand for high-bandwidth memory.

As tens of billions of dollars continue to be spent on data center infrastructure, the demand for memory chips has gone through the roof, sparking an unprecedented price rise for the semiconductors, which is set to continue this year.

Sassine Ghazi, CEO of Synopsys, a key semiconductor design tool company, told CNBC in an interview last week that the chip “crunch” will continue through 2026 and 2027.

Ghazi said most of the memory from the top players “is going directly to AI infrastructure, but many other products need memory, so those other markets are starved today because there is no capacity left for them.”

Samsung, SK Hynix, and Micron are the biggest memory companies in the world.

While these companies are aiming to expand manufacturing, it takes a “minimum” of two years before that comes online, which is one reason why the crunch is set to last, Ghazi said.

Memory prices have historically traded in cycles of short supply or oversupply, which have dictated the price of the components. However, some analysts have dubbed the current trend a “super cycle.”

“Now it’s a golden time for the memory companies,” Ghazi said.

Winston Cheng, chief financial officer of the world’s biggest PC maker Lenovo, also said in an interview last week that “we will see memory prices going up,” noting there is high demand and not enough supply.

Memory price jumps mean that consumer electronics companies may have to consider price rises.

Chinese electronics giant Xiaomi, one of the world’s biggest smartphone firms, said last year that it expects price rises to happen in 2026 for mobile phones. However, Synopsys’ Ghazi said price hikes are “happening already.”

Lenovo’s Cheng said as there is high demand for memory chips, he is “very confident that the cycle would be such that we could pass on the cost.”

Lenovo has a global “diversified” supply chain with 30 manufacturing plants across the world, which may help it mitigate some of the risks around the memory shortage, Cheng said.

He noted however, that the consumer device segment is “also hurting a little bit … in terms of price demand.” He added that PC and laptop users are still upgrading to Windows 11, Microsoft‘s operating system that was released in 2021.

“I think that replacement cycle is very real,” Cheng said. Nevertheless, Price increases would “start hitting the lower end” of the electronics market first.