The RAM Shortage

[Moonface]

So if you haven't heard, or like me you haven't been really following it much, there is currently a severe shortage of RAM for consumer products which has caused it to see a massive price hike. Here's the simple summary of the events, reasons, and consequences behind this:

• The biggest names in the AI industry, including Google, Meta, OpenAI, and Anthropic, are buying up DRAM for their data centers in huge amounts. To make matters worse, the big companies that produce this DRAM such as Samsung, SK Hynix, and Micron, are shifting their resources away from consumer-focused products in favor of lucrative deals with these AI companies for DRAM.
  
  
• Samsung, SK Hynix, and Micron control 93% of the entire global DRAM market. Any other company has a market share of less than 5%.
  
  
• Micron went so far as to announce they are winding down their long-standing consumer facing brand Crucial in favor of providing DRAM to AI companies.
  
  
• A key component for making DRAM is silicon wafers; however, these wafers are also used for high-bandwidth memory (HBM) which are used heavily by AI companies. Per NAND Research, “wafer capacity consumed by HBM exceeds that of standard DRAM by a factor of three.” Obviously, this further exacerbates the shortage of DRAM as the AI companies don't just require tons of it, but there are also less silicon wafers that can be used to make DRAM.
  
  
• Among the obvious things like consoles and PC's, DRAM is used in practically everything nowadays, including smartphones, smart TVs, and cars. It is basically the backbone of modern computing of any kind.
  
  
• SSD's are also being affected, as AI companies are also buying up data storage for their centers as well.
  
  
• As a result of this increased demand and shift in supply priority, RAM kit prices have increased by 252% from September to December, while the average price for SSD's has seen a 42% increase in the same time period.
  
  
• For some perspective, the Nintendo Switch 2 uses 12 GB LPDDR5X modules which have increased in price by 41%, and NAND flash which has risen by 8%. The likelihood that Nintendo will be able to absorb that increased cost is very low, and could force the company to increase the price of the Nintendo Switch 2.
  

Source: The Verge | RAM price hikes: the latest on the global memory shortage

As if there wasn't enough reasons to hate AI already, we now all get the joy of it screwing us no matter how much we try to avoid it. I avoid using AI like it's the damn plague but sooner or later the greed of the AI companies and the companies supplying them is going to creep in and infiltrate things I use in terms of price, supply and quality even if AI itself isn't even part of those things.

I guess it's a good thing I got a Switch 2 at launch and don't need a new laptop any time soon, and although there probably wasn't going to be a new console generation announced any time soon I really can't see Sony or Microsoft putting out a PS6 or new Xbox respectively when this shortage is going to make it a bastard to even make more of their current consoles. On the bright side, maybe this forcing a longer console generation again will push developers to eventually start optimizing their games to get more out of the hardware because there won't be new hardware to rely on.

[Maniakkid25]

Welp, as if there needed to be another thing to drive up the price of a Steam Machine...

The AI Bubble cannot pop fast enough. I can't wait for it to do so, and show that all these companies were holding on to sand the entire time, and they have to suddenly shift priorities again, as if it wouldn't have costed less to have never pulled out in the first place. Can't wait for the economy to implode once more in my lifetime! What is this, the third or fourth time?

[Moonface]

Welp, as if there needed to be another thing to drive up the price of a Steam Machine...

Depending on how badly this affects the price of the Steam Machine, there's gotta be a chance that the Steam Machine ends up being the most unfortunately timed gaming hardware launch of all time right? Imagine spending years developing that thing and right as you get ready to release it, you have to deal with unpredictable U.S. tariffs and this RAM shortage causing chaos with not only production but also pricing.

No idea if it's related to this or the upcoming Steam Machine but I did just see that the LCD Steam Deck is not being restocked at all. I assume it was just gonna be phased out anyway but the timing of it happened to align up with a time where it would be considerably more expensive to produce more of them anyway.

[Moonface]

An interesting insight into the current state of things from a recent Xbox blog post:

We are in a hardware component crisis. When I joined as CEO in February, the price we paid for console storage components was over 2x as high as we paid last fall. These costs have since doubled again. And as we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier. Memory costs have followed a broadly similar trajectory. While the entire industry is facing a components crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half decade. We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix.

Source: Xbox | Next 100 Days: XBOX Reset

That's absolutely insane, and I also think the 5x price increase for 2027 is probably too low, considering the timeline given for price increases in that statement:

• Fall 2025 - Original price of components
  
• February 2026 - Price of console storage components up by more than 2x (e.g. $100 > $200)
  
• June 2026 - Price of console storage components doubled again (e.g. $200 > $400)
  

If prices have hit 4x the original amount in the span of 4 months, there's no way it's only going to increase by 1x more between now and Fall 2027 unless demand for storage components from AI companies stagnates or something.

[Karo]

 Well that concerning it really feel like consoles are going to get more expensive gaming seem more and more like a luxury hobby. And if they keep going up your honestly better off just buying an actual PC and those aren't doing much better pricewise I'm sure. 

I honestly expect a pretty bleak Christmas season for gaming.

[Dragon Lord]

And if they keep going up your honestly better off just buying an actual PC and those aren't doing much better pricewise I'm sure. 

I honestly expect a pretty bleak Christmas season for gaming.

The opposite might actually be true. As PC gaming continues to get further out of reach for most people because of soaring RAM and GPU prices, consoles might become more of an attractive option. You still get playable performance without gouging your bank account or having to put yourself into dept to get a loan to afford a semi-decent PC. If PlayStation can keep the PS6 sub-$1,000 it's going to become a very attractive option for people who can't afford to shell out $2,500-$3,000 for a PC with a 5070 in it.

If you can get a PS6 (or whatever the Helix ends up being named in the end) for $800-$900 and it gives you equivalent performance of a 5070/5080, then I think then choice would be pretty obvious for most people. You have to remember that for most people, buying something and just plugging and playing remains the most optimal choice. That's why pre-built PC websites have become so popular. A very small minority actually want to buy the parts separately and build the PC themselves.

Plus if you look at most used GPUs among Steam users, you see that most people are using very old, nearing outdated graphics cards. Less than 15% of Steam users are using anything from the 3090 and up. Less than 3% are using a 5070, 5080 or 5090. Games are only going to be getting harder and harder for older GPUs to run, and when these people who are still running old or bottom of the barrel GPUs start to be forced into either buying a new GPU (and depending on how much of a jump is made, you might end up needing a new PSU as well) or just buying a console for a fraction of the price, the choice isn't going to be that hard.

Hell, I have a 3080 which is still considered a "good" GPU and I'm starting to notice difficulty in running more modern games with decent settings and high FPS. I'm sure it's not going to be too much longer before I'm running new games at ultra low settings for barely 60 FPS, and at that point I might as well just get new games on my PS5 (or eventual PS6 if they give me a reason to get one right away) until it becomes semi-affordable again to buy new components, though in my case I'd probably just buy a whole new PC since I know that I'd need a new PSU anyways and I'm too lazy to build my own PC/change parts out.

[Karo]

That a fair point NIght Lord I didn't really think about it like if PC part are soaring way above console level I was kinda thinking it was PC parts are expensive, but not soaring, but I really haven't been keeping track of those. I think I got my PC at a good time where thing weren't quite impacted by the AI shortages of everything and my GPU is a 3060 and this was from a PC that I bought like two years ago now, but I am still running thing that I care to play really well.

But like you said if sometime in the future during the PS6 or maybe the Switch 3 era it might be too expensive for me to buy a PC for cheap I might go back to console which would be kinda interesting thing to happen, but I am also kinda wondering are we coming to the end of the AI bubble? Or is it still blowing up? I was thinking for a second that might be good for console and pc gaming, but then the effect of a bubble burst is never good for the economy so I'm not really sure if that would make thing better or worst.

I guess the post burst would mean thing would get a lot more cheap, but I'm not sure if people would wanna put money into their hobbies during it?

[Dragon Lord]

People have been talking about the AI bubble popping for the last year or two and it hasn't. If anything, it's getting much worse very quickly. Companies love the idea of replacing workers with AI, and as long as that exists, more and more AI Datacenters are going to be built, which will require more and more of the RAM supply. Plus companies like NVIDIA are massively scaling back their work on things like GPUs to instead chase that AI money. So eventually we're going to be looking at a shortage of available GPUs in the market as well because NVIDIA can make more money making components for AI Datacenters than they can making GPUs for us peasants.