The artificial intelligence (AI) boom is rapidly increasing global chip demand. As a result, several major technology companies have raised concerns about a possible memory shortage.
According to Bloomberg, Tesla CEO Elon Musk and Apple CEO Tim Cook have warned about supply risks. Notably, the situation has worsened since early 2026. Therefore, industry leaders now fear a larger disruption.
The shortage mainly involves dynamic random-access memory (DRAM). This memory powers smartphones, data centres, and electric vehicles. Consequently, limited supply could push consumer prices higher.
Tesla Moves to Secure Its Own Supply
To reduce risk, Elon Musk announced plans for a new semiconductor plant called “TeraFab.” He believes Tesla must control its own chip production.
“To remove the likely constraint in three to four years, we will build a Tesla TeraFab,” Musk said. The plant will produce logic, memory, and packaging chips. In this way, Tesla hopes to avoid future bottlenecks.
Meanwhile, Apple CEO Tim Cook warned that rising DRAM prices may pressure profit margins. Similarly, Micron Technology described the current situation as “unprecedented.” Clearly, concerns are spreading across the ector.
AI Expansion Driving Memory Shortage
At the core of the crisis lies the rapid expansion of AI. Companies such as Alphabet and OpenAI are aggressively expanding data centres. In addition, they are stockpiling high-bandwidth memory to power advanced AI models.
These facilities use millions of Nvidia accelerators. As a result, they consume memory at record speed. Consequently, consumer electronics manufacturers struggle to secure key components.
Between December 2025 and January 2026, a major DRAM component rose by 75%. Following this surge, semiconductor prices increased across the market.
Furthermore, Lam Research CEO Tim Archer warned of an “unprecedented demand wave.” He added that AI demand could surpass all other chip demand before the decade ends.
At the same time, Alphabet and Amazon plan to invest up to $385 billion this year in AI infrastructure. Therefore, analysts believe memory supply may tighten even before these projects are completed.
Electronics Sector Braces for Higher Costs
As DRAM prices rise, the wider electronics industry prepares for impact. For instance, analysts expect margin pressure on many technology companies.
A Bernstein analyst described the market trend as “parabolic.” On one hand, memory producers such as Samsung, Micron, and SK Hynix may benefit. On the other hand, device makers could see shrinking profits.
Additionally, Nothing founder Carl Pei warned that smartphone prices may increase soon. Lenovo CEO Yang Yuanqing also emphasized that the imbalance is structural, not temporary. Therefore, quick relief appears unlikely.
A Growing Global Hardware Crunch
Overall, memory supplies continue to tighten. At the same time, AI demand shows no sign of slowing.
For now, the AI revolution continues to drive innovation. However, it is also creating pressure across the hardware ecosystem. If this trend continues, the world could face a serious hardware crunch.
Even the largest technology companies may struggle to escape its impact.