- The AI-driven reminiscence scarcity does not simply have an effect on PCs
- More capability is coming, however not earlier than 2027
- Low-margin price range merchandise are prone to be hit hardest
What do the best DACs, the best Hi-Res Audio players, the best TVs, and the best soundbars all have in frequent? They’re all going through element shortages and value hikes – not due to tariffs, however due to the AI-driven scarcity of reminiscence and storage chips. And the ache’s going to be notably pronounced on the extra inexpensive finish of the market, the place revenue margins are already razor-thin.
As you are little question conscious, the AI trade is shopping for plenty of reminiscence for its information facilities: as Reuters reported again in October, only one AI agency, OpenAI, intends to order 900,000 semiconductor wafers in 2029. That’s round 40% of the world’s complete manufacturing. And there’s a lot extra demand within the trade.
As The Wall Street Journal reported this week, “The rapid build-out of infrastructure for artificial intelligence is consuming a large portion of available supply of NAND flash memory, DRAM memory and hard drives. That has resulted in a shortage of memory for other markets such as PCs and smartphones.”
Audiovisual units aren’t the identical as PCs, and do not usually want as a lot reminiscence as smartphones. But they nonetheless want some reminiscence as a way to do what they do. Everything from sensible audio system to sensible TVs to in-car leisure programs use RAM alongside their processors, and a few of them use NAND storage too, as a result of they’re all simply small computer systems at coronary heart; both of these components’ prices are rocketing.
We’ve already seen Samsung warn that its TVs’ prices may rise due to comopnents shortages, whereas there are warnings about smartphone makers scaling back their specs for this year’s mobile phones, chopping their reminiscence to chop the price of manufacturing.
And based on NPR, reminiscence costs are anticipated to rise much more this yr. As Avril Wu of the consultancy Trendforce instructed NPR, “I keep telling everybody that if you want a device, you buy it now.”
How AI could affect AV
AI data centers don’t use the same memory chips as a DAC or a Hi-Res Audio player: they use High Bandwidth Memory (HBM), not the DDR RAM you’d find in a PC or PlayStation. But those differing chips are made from the same kind of semiconductor wafers, and those wafers are in ever-increasing demand because HBM uses roughly three times more of those wafers than DDR5 RAM does.
They’re also much more profitable to sell, and as a result many firms are shifting focus from consumer memory chips to data center ones – so for example Micron, one of the big three memory makers alongside SK Hynix and Samsung Electronics, has shut down its long-standing consumer memory business, Crucial, “to improve supply and support for our larger, strategic customers in faster-growing segments”. In different phrases, AI.
As some producers shift focus, new capability for different kinds of reminiscence is not approaching board quick sufficient to cowl the demand. So for instance in October SK Hynix announced that it “has already secured full customer demand for its entire DRAM and NAND production for next year”, and that it will must broaden its manufacturing to deal with the market calls for – but even the equipment to make the chips are set to rise in price.
In the shorter time period, which means greater reminiscence costs. Much greater costs. CNBC reports that RAM prices are expected to rise “more than 50% this quarter compared to the last quarter of 2025.” And the Bloomsbury Intelligence and Security Institute says that “DRAM costs have additionally surged 171% year-over-year, outpacing gold, whereas DDR5 spot costs have quadrupled since September 2025. DRAM and NAND costs doubled in a single month”.
While capability is being added to current manufacturing vegetation and new vegetation are being constructed, that capability is not anticipated to return on-line till 2027.
That’s prone to have two key impacts on the AV {hardware} market. The first is that we’ll see value will increase down the road, particularly on the price range finish of the market the place producers cannot merely swallow the elevated price: there’s quite a bit much less margin on a $300 sensible TV than a $3,000 one.
The second is that producers could return to the drafting board as some smartphone companies have completed, limiting their subsequent merchandise’ specs to compensate for shortages and value hikes. It might also persuade some companies to postpone their product plans altogether till market situations are extra favorable.
We’ve been right here earlier than, after all: I keep in mind the fully fruitless seek for in-stock AV receivers after chip manufacturing had shut down throughout COVID lockdowns. At least this time we all know the element crunch is coming, and may make buying plans accordingly.
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