DDR5 Chip Prices Surge Over 4x in One Year; Apple and Microsoft Price Hikes Reveal Memory Shortage May Extend Through 2028
Alina Collins
Apple and Microsoft raised prices on iPads, Macs, and Xboxes within five hours of each other, both blaming an unprecedented AI-driven memory-chip shortage; DDR5 prices have more than quadrupled in a year, and Micron's CEO says he cannot see when supply will catch up with demand — the data-center arms race is now hitting consumers' wallets.
How fast are prices rising?
Within five hours on Thursday, Apple and Microsoft both announced price hikes on flagship products — iPad, Mac, Xbox — each pointing to the same cause: AI-driven memory-chip shortage.
DDR5 chips commonly used in PCs have risen more than fourfold in the past year, according to inSpectrum Tech data. This means → a chip that cost $1 a year ago now costs over $4, and that cost is landing directly in retail prices.
Sony had already raised the PS5 flagship price by up to $150 in March, and memory prices have kept climbing since.
When does the shortage ease?
Micron CEO Sanjay Mehrotra said Wednesday that supply may improve by 2028, but he "cannot see" a point where supply catches demand.
Bloomberg Intelligence analyst Jake Silverman projects the squeeze will likely persist until 2028, with prices unlikely to fall before 2027. In plain terms = consumers will keep paying more for electronics for at least the next two years.
Silverman added that consumer-device prices may need to keep rising to maintain healthy margins, though the pace of increases should moderate.
Chipmakers are spending billions — why isn't it enough?
Samsung Group plans a spending package of up to 1,000 trillion won (~$651 billion) over the next decade, the largest such plan in Korean history; Samsung Electronics alone has already spent over $73 billion on capacity expansion and R&D this year.
SK Hynix is pursuing a $29 billion U.S. listing, with Chairman Chey Tae-won pledging to double capacity within five years; TSMC's capex this year is set to reach $56 billion, yet CEO C.C. Wei told shareholders this month that even with new U.S. capacity coming online, TSMC still cannot meet U.S. customer demand.
Micron is squeezing extra output from existing fabs while pushing a Taiwan acquisition and new plants in Idaho and New York. This reflects a core tension: the money is being spent, but chip fabs typically take years from groundbreaking to first shipments.
Why did the entire industry miss this coming?
TSMC CEO C.C. Wei revealed he once asked Nvidia CEO Jensen Huang why he hadn't flagged the AI boom earlier. Huang's answer: he hadn't seen it coming either. Wei concluded: "Nobody foresaw this — including TSMC."
This means → the shortage is not one company's miscall — it is the collective misjudgment of an entire industry on how fast AI demand would explode.
Two forces compounded the problem: post-COVID chip oversupply led most makers to skip expansion; then AI demand surged, leaving a handful of surviving suppliers facing record profits and insatiable customers.
Who gets hurt the most?
The shortage extends beyond memory chips (DRAM — chips that store data) to logic chips used for computation — it has spread across the entire chip supply chain.
Smaller manufacturers are hit hardest: memory suppliers are prioritizing large-customer orders, leaving some small makers unable to source chips at all. In plain terms = Apple and Microsoft can at least raise prices to pass on costs; small companies don't even have that option, because they can't get the chips in the first place.
Micron EVP of global operations Manish Bhatia said Wednesday: "We are doing everything we can to squeeze more output from existing fabs." This reflects that even top-tier suppliers are running close to physical capacity limits.
Content is for reference only, not financial advice.