Rising Memory Chip Costs Put Pressure on Electronics Retailers

As the global race for artificial intelligence accelerates, memory chips are becoming more and more expensive. As a result, the costs of some consumer electronics are starting to rise for both retailers and consumers.

Memory storage, called RAM, is crucial for all computing devices, including phones, tablets and laptops. The cost of chips has risen due to a supply shortage driven largely by massive demand for AI data centers. Companies such as Nvidia, Advanced microdevices And Google have worked to secure RAM for their chips.

Apple announced Thursday that it would raise its prices on MacBooks and iPads — passing on the rising cost of memory to consumers — with the possibility of more price hikes in the future. The memory shortage poses an “unprecedented challenge,” the company said in a statement.

Incoming Best buy CEO Jason Bonfig said on a call with reporters earlier this month that the company expects its IT division to be hardest hit by the price hike.

“We saw staggered price increases in the first quarter, so moving into the second quarter we expect [average sale prices] “We increased inventory in the first quarter, which you can see on our balance sheet, which helps us mitigate it.”

Soaring memory costs are expected to reduce global shipments of personal computers by 10.4% and those of smartphones by 8.4% in 2026, according to Ranjit Atwal, principal analyst at Gartner, citing a February study. Gartner also predicts that PC prices will increase by 17% and smartphone prices by 13%, compared to 2025 levels.

“What’s happening this time, compared to previous times when memory prices have gone up, is the magnitude with which memory prices are going up,” Atwal said. “Secondly, there is the length of time we expect prices to remain high. … It looks like it won’t be until the end of 2027 that we get to any type of regional pricing.”

Even if price increases aren’t immediately visible in stores, Atwal said, it’s inevitable that demand will outstrip supply. Some retailers brought their inventories forward into the first quarter in anticipation of rising prices, he added, but that cushion can only last so long.

“It will catch everyone up,” he said. “You find yourself at a point where you just have no control over what you can do. You have to pass it on, and that’s the difference now versus before. The market is also more mature, so people are expected to buy anyway.”

Consumers might not even be aware of the price increases, Atwal said. Most people upgrade their laptops after four or five years and don’t even remember what they paid for before or the specifications of their old models, he said.

This gap could result in a “somewhat delayed impact” on consumer behavior, Atwal said, but the final effect is sure to hit them soon.

So far, Bonfig said, Best Buy sees no indication that consumers are postponing purchases or even that rising memory costs are affecting their budgets.

“What we do with this customer is talk about what they’re replacing, what their needs are and how to get them to technology that will be significantly better in many ways,” Bonfig said. “That’s really the goal that we’ll continue to push, to make sure we have that breadth and assortment.”

A Best Buy spokesperson told CNBC that the company still sees customers spending and very few of them worry about memory. In the first quarter, Best Buy said it recorded its ninth consecutive quarter of positive comparable sales in the IT sector.

Anthony Chukumba, an analyst at Loop Capital who covers Best Buy, told CNBC he thinks larger retailers such as Best Buy will fare better than smaller ones, because of the market share they hold. As suppliers pass on the extra costs, Chukumba said larger retailers will have more “leverage” to avoid price hikes for as long as they can.

“A lot of times investors think about things too simplistically, like, ‘Oh, increasing memory costs because of AI, that must be really bad for Best Buy,'” Chukumba said. “Best Buy can’t do anything about it. … It’s their business, they’re still managing these changes, and they’re seeing the same things you’re seeing, probably before you see them, and in much more detail, and that’s how they’re managing.”

Chukumba said he thinks the long-term impacts of memory costs won’t be as great as they appear at the moment.

“As technology is constantly evolving and getting cheaper and cheaper, you may face a higher memory price, but if you buy something relative to what you would have bought a year ago, let alone two years ago, it will still have vastly greater capacities, and consumers are not aware of that,” he said.

This could also affect other retailers, such as Target, Amazon, Costco And Walmart. Target declined to comment on rising memory costs, and Amazon also declined to comment. Costco and Walmart did not respond to requests for comment.

Still, the broader risks posed by the memory chip shortage could spell trouble.

Rising costs could lead consumers to hold on to their devices longer, leading to fundamental changes in upgrade cycles for products such as smartphones, according to Atwal, the Gartner analyst.

“Consumers…will compromise on what they need, and vendors will have a harder time offering AI features, which are sort of dependent on them, and generally want a premium for them,” Atwal said.

Earlier this month, a coalition of organizations, including the National Retail Federation, wrote a letter to the U.S. Treasury and Commerce departments asking the government to examine the “urgent imbalance” in memory chips and the potential for “significant and sustained near-term price increases” for consumers.

“The real impacts of these trends have already begun to manifest and threaten to deteriorate rapidly if the situation is not corrected,” the letter said.

The organizations urged the government to work with memory chip manufacturers and chip buyers to “protect against harm to consumers, workers and businesses of all sizes.”

Jon Gold, NRF vice president of supply chain and customs policy, told CNBC that this trend could lead to a shortage of consumer electronics, in addition to possible price increases.

“The impact that retailers can take on their own is always limited, so they need to work with their suppliers as best they can to try to minimize price increases and the impact that has on consumers,” Gold said. “But the bigger impact is that the lack of these memory chips is potentially a lack of products.”

Gold said if consumers start holding on to their devices longer due to rising prices and the difference in cost to upgrade, it would affect both retailers and suppliers as the consumer electronics market would stagnate.

“Unfortunately, it’s an even more complicated factor for a retailer and others who are making long-term plans and entering into contracts six, nine or 12 months in advance,” Gold said. “It’s very complicated and very complex, and that leads to more pressure on retailers and manufacturers.”