Rise in memory chip costs puts pressure on electronics retailers
HP computers available at Best Buy on Black Friday in New York, November 28, 2025.
Victor J. Blue | Bloomberg | Getty Images
As the global AI race accelerates, memory chips are also becoming more expensive. As a result, the costs of some consumer electronics are starting to rise for both retailers and consumers.
Memory storage, known as RAM, is crucial for all computing devices, including phones, tablets, and laptops. The cost of chips is rising largely due to supply shortages caused by the massive demand for AI data centers. Companies like Nvidia, Advanced Micro Devices And Google They strive to secure RAM for their chips.
Apple On Thursday, it announced that it was increasing prices for MacBooks and iPads — passing the increased cost of memory on to consumers — with the potential for further price increases in the future. The company said in a statement that the lack of memory was an “unprecedented problem.”
Incoming Best Buy The company expects its PC division to be hardest hit by price increases, CEO Jason Bonfig told reporters on a call earlier this month.
“We saw some surprising price increases in the first quarter, so as we move into the second quarter, [average sale prices] “We brought in more inventory in the first quarter, you can see that in our balance sheet, which helps us reduce inventory,” Bonfig said.
Memory costs
Rising memory costs are expected to reduce global PC shipments by 10.4% and smartphone shipments by 8.4% in 2026, according to February research by Gartner senior managing analyst Ranjit Atwal. Gartner also predicted that PC prices will increase by 17% and smartphone prices by 13% compared to 2025 levels.
“What has happened this time, compared to previous times when memory prices have increased, is the extent to which memory prices have increased,” Atwal said. “The second is the length of time we think prices will remain high. … It doesn’t look like it will be until the end of 2027 before we get to any regional pricing.”
Atwal said that although price increases may not be immediately visible in stores, it is inevitable that demand will exceed supply. He added that some retailers brought forward their stocks in the first quarter with the expectation that prices would increase, but this increase could only last for so long.
“It’s going to get everyone,” he said. “You get to a point where you have no control over what you can do. You have to pass it on, and that’s the difference now from where we were before. The market is more mature, too, so there’s an expectation that people will still buy.”
Atwal said consumers may not even be aware of the price increases. Many people upgrade their laptops after four or five years and may not even remember how much they paid before or what the specs of their older models were, he said.
This difference may lead to a slightly “lagged impact” on consumer behavior, but the ultimate impact will hit them soon, Atwal said.
Customers are still spending
So far, Bonfig said, Best Buy hasn’t seen any indication that consumers are bringing forward their purchases or that rising memory costs are affecting their budgets.
“What we do with this customer is talk about what they’re changing, talk about what their needs are, and talk about how we can engage them in technology that will be much better in many different ways,” Bonfig said. “That’s the focus we’re going to continue to have to make sure we have that breadth and diversity.”
A Best Buy spokesperson told CNBC that the company still sees customers spending and few are concerned about memory. inside Best Buy said it saw positive comparable sales for the ninth consecutive quarter in PC in the first quarter.
Loop Capital analyst Anthony Chukumba, who follows Best Buy, told CNBC that he thinks large retailers like Best Buy will fare better than smaller retailers because of the market share they have. As suppliers move forward with additional costs in mind, Chukumba said large retailers will have more “leverage” to avoid price increases for as long as possible.
“A lot of times investors think about things in very simplistic terms and say, ‘Increasing memory costs due to AI must be very bad for Best Buy,'” Chukumba said. “There’s nothing Best Buy can do about it. … That’s their job, they’re managing these changes all the time, and they see the same things you see, probably in much more detail before you see them, and so they achieve it.”
Chukumba said he believes the long-term effects of memory costs will not be as significant as they currently appear.
“Because technology is constantly improving and constantly getting cheaper, you may have a headwind like higher memory prices, but if you’re buying something compared to what you would have bought a year ago, let alone two years ago, that thing will still have vastly superior capabilities and consumers won’t realize it,” he said.
It may also affect other retailers. Aim, 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.
Shortages and price hikes
However, the broader risks posed by memory chip shortages could prove problematic.
Rising costs could lead to fundamental changes in upgrade cycles for products like smartphones, leading consumers to keep their devices longer, according to Gartner analyst Atwal.
“Consumers will compromise on what they need, and vendors will find it harder to push AI features that sort of depend on that, and they will often charge a premium for them,” Atwal said.
Earlier this month, a coalition of organizations including the National Retail Federation announced a letter He called on the U.S. Treasury and Commerce departments to ask the government to examine the “urgent imbalance” in memory chips and the potential for “significant and sustained short-term price increases” for consumers.
“The real-world effects of these trends are already showing and the situation is in danger of rapidly deteriorating if not corrected,” the letter said.
The organizations called on 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’s vice president of supply chain and customs policy, told CNBC that this trend could lead to consumer electronics shortages as well as potential price increases.
“Retailers are always limited in the impact they can take on themselves, so they need to do the best they can with their sellers to minimize price increases and its impact on consumers,” Gold said. “But the bigger impact is that a shortage of these memory chips is potentially a product shortage.”
If consumers start holding on to devices longer due to price increases and the upgrade cost differential, it will impact both retailers and suppliers as the consumer electronics market stagnates, Gold said.
“Unfortunately, that’s a more complicating factor for a retailer and others who are making long-term plans and making contracts six, nine, 12 months in advance,” Gold said. “It’s very complex, it’s very complex, and there’s more pressure on retailers and manufacturers.”
