Memory crunch threatens higher prices for screens

Samsung Electronics has warned that a tightening supply of memory chips risks pushing up prices for televisions, smartphones and home appliances, broadening the impact of a global shortage driven by surging demand for artificial intelligence hardware. The caution underscores how constraints in a core component are rippling across consumer electronics at a time when manufacturers are racing to invest in AI-centric products.

Speaking on the outlook for the industry, Samsung Electronics co-chief executive T M Roh said the imbalance between demand and supply for memory remains severe and unprecedented, leaving few companies insulated from the consequences. While smartphones have been widely expected to bear the brunt, Roh indicated that televisions and household appliances would also feel pressure, and did not rule out price adjustments to offset higher costs.

Memory chips, particularly DRAM and high-bandwidth variants used in AI servers, have become a bottleneck as cloud providers and device makers expand computing capacity. Capital spending by chipmakers is rising, yet lead times for new fabs and the technical complexity of advanced memory mean relief is not immediate. As a result, manufacturers that rely on memory across product lines face higher input costs and tighter allocation.

Samsung’s position amplifies the warning. The company is the world’s largest television maker by volume and a major supplier of memory to the broader industry, giving it a vantage point on both sides of the market. Roh said the effect on televisions and appliances was “inevitable”, a signal that pricing strategies may need to adapt if shortages persist into peak sales periods.

Industry data show that memory prices have already firmed after a prolonged downturn, reflecting a sharp rebound in demand from data centres training and deploying large AI models. Consumer devices increasingly incorporate on-device AI features that require more memory, adding another layer of demand. Analysts note that while some manufacturers can mitigate costs through long-term contracts or inventory buffers, smaller brands are more exposed.

For households, the risk is a broader rise in the price of big-ticket electronics at a time when budgets remain under strain. Television makers have spent years compressing margins through intense competition and incremental feature upgrades. A sustained increase in memory costs challenges that model, especially as panels, logistics and energy remain volatile inputs.

The warning also has implications beyond hardware pricing. Microsoft has been promoting a strategy that positions smart televisions as gateways to console-quality gaming through cloud streaming. Many newer TVs, including models from Samsung, can access Xbox Game Pass, reducing the need for dedicated consoles. Higher TV prices could slow adoption and complicate efforts to broaden gaming audiences through living-room screens.

Suppliers and retailers are watching closely. Some brands may prioritise higher-margin premium models to absorb costs, while others could delay launches or trim features to manage bill-of-materials pressure. Promotional activity may also become more selective if manufacturers seek to protect profitability.

Chipmakers argue that the cycle will eventually rebalance as new capacity comes online and yields improve, but caution that AI’s appetite for memory is structurally different from past booms. High-bandwidth memory used alongside advanced processors is produced in smaller volumes and requires close coordination across the supply chain, making rapid expansion challenging.

Samsung has invested heavily to strengthen its memory leadership, yet even the largest producers face trade-offs between supplying data centres and meeting consumer-device demand. Executives across the sector have stressed the need for disciplined investment to avoid a return to oversupply once AI spending normalises.