Soaring iPad, Xbox prices reveal pain of memory chip mess

Published Sun, Jun 28, 2026 · 05:22 PM

[SEATTLE] Within a span of five hours on Thursday (Jun 25), Apple and Microsoft hiked the prices for such popular products as Xbox video-game consoles, Macs and iPads.

Both companies blamed an unprecedented shortage of memory chips driven by the artificial intelligence boom. And despite high-profile efforts to increase supply, the crunch and its impact on consumer prices won’t end anytime soon. 

On Monday, Samsung Electronics and SK Hynix are expected to announce new chip manufacturing investments worth hundreds of billions of dollars, according to South Korean media reports.

Samsung Group, of which Samsung Electronics is a part, is set to unveil a 1,000 trillion won (S$843.6 billion) spending package over the next decade, in what would be the largest such plan in the country’s history, Maeil Business Newspaper reported Friday. 

And yet, industry executives warn the shortage will persist for years, as new data centres vacuum up chips. Micron Technology chief executive officer Sanjay Mehrotra said Wednesday that while chip availability may improve in 2028, there is “no line of sight” to when supply will catch up with demand.

That means chip prices will likely keep rising, forcing consumers to pay more for laptops, phones and other devices. Already, the price of a DDR5 chip typically used in personal computers has increased more than fourfold in the last year, according to data from inSpectrum Tech.

“With tight supply and demand likely lingering into 2028 at this point, pricing is unlikely to decline through 2027,” said Bloomberg Intelligence analyst Jake Silverman. “Consumer device prices may have to keep increasing, albeit at more moderate rates just to sustain healthy product margins.”

The AI infrastructure boom led by Nvidia’s graphics processing unit chips has upturned the memory market. The supply crunch has been exacerbated by the fact that the industry didn’t see the boom coming.

“Beyond expectations” of TSMC, Nvidia

Hit by a massive chip glut after the Covid-19 pandemic, companies didn’t invest in expanding capacity. Now, the handful of producers that survived – some just barely – find themselves in a unique position. Investors love them, their customers are desperate and they’re raking in profits like never before.

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It’s not just memory chips that are in short supply. Logic chips used for computation are also scarce, driving up prices. 

Taiwan Semiconductor Manufacturing Co (TSMC), the biggest producer of advanced logic chips, won’t be able to fulfill demand led by American customers even as more manufacturing capacity comes online in the US over the next few years, CEO Wei CC told shareholders this month.

“AI development has gone beyond our expectations,” he later told reporters. 

Wei added that he once asked Jensen Huang why the Nvidia boss did not warn him in advance about the AI boom. Huang, Wei said, didn’t anticipate the boom, either.

“No one foresaw this coming – including TSMC,” Wei said. 

The companies are expanding manufacturing as quickly as they can. 

TSMC capital expenditures for this year alone are expected to reach US$56 billion. SK Hynix plans a US$29 billion US listing, after chairman Chey Tae-won said earlier this month that he intends to double capacity over the next half-decade.

And even before Monday’s expected announcement, Samsung planned to spend more than US$73 billion this year on capacity expansion and research.

Micron, meanwhile, is trying to coax additional production from its current facilities even as it adds supply from an acquisition in Taiwan. The company also is building new factories in Idaho and New York State.

“We’re doing everything we can,” said Manish Bhatia, executive vice-president of Micron’s global operations, in an interview Wednesday. “We increased capex even this year to be able to do some more productivity improvements and squeeze more production out of our existing fabs.”

For consumers seeking to buy an Xbox or MacBook, however, it’s too little, too late. Sony Group, for example, raised the price of its flagship PlayStation 5 by as much as US$150 in March. Since then, memory prices have only gone up. BLOOMBERG