DRAM prices rose up to 400% since 2024, hurting consumers and businesses. Zoho founder Sridhar Vembu said, "the four-fold increase in server prices, higher memory and AI token costs make business conditions challenging." Smartphone prices in India also grew 16% in early 2026. Experts expect these high costs to remain until 2027.
This has starved the consumer electronics market, triggering up to 400% DRAM (memory chip) price hikes since 2024. Beyond memory, other chip prices are becoming dearer. Advanced foundries like Taiwan’s TSMC are increasing node costs, prompting major suppliers, including Intel and AMD, to raise hardware prices.
What is the impact on companies and consumers?
Enterprise customers face higher costs as memory has become one of the most expensive hardware components. In a post on X, Zoho founder Sridhar Vembu pointed out that the four-fold increase in server prices, higher memory and AI token costs (price of using AI) make business conditions challenging. According to Counterpoint Research, smartphone prices in India rose 16% on average in the first half of 2026.
A weaker rupee has also made imported components more expensive, leaving most brands with little choice but to raise prices. Phones priced below ₹10,000 saw the sharpest hikes, averaging around 32%, because memory now accounts for a much larger share of their build cost.
Will local production help cool prices?
Domestic semiconductor facilities, including Tata Electronics, Kaynes Technology, and Micron’s ATMP plant, will help develop the local ecosystem. However, they will not cool short-term global prices.
These ventures primarily focus on assembly, testing, marking and packaging (ATMP/OSAT) or specialized fabrication nodes, rather than the raw fabrication of leading-edge consumer DRAM or advanced HBM wafers, which are driving the global shortage. Besides, these facilities are in early setup or pilot phases. Commercial output, at scale, is a few years away. Hence, domestic chip assembly cannot offset immediate cost and supply constraints.
What coping strategies are companies adopting?
From mid-2025 to now, memory and storage component prices have surged 300%, according to IDC. Nvidia chips have become dearer by 60-100%. Companies are responding by increasing device prices. In a departure from earlier trends, Apple increased prices on older models by 14-18% after the iPhone 18 was launched in September.
Smartphone brands are selectively increasing prices, adjusting specifications and focusing on premium products where margins are better. Large cloud providers and OEMs are signing long-term supply agreements to secure memory availability. Some vendors are optimising software to reduce memory requirements, while data-centre operators are improving utilisation rates to extract more value from existing hardware.
When will the prices cool off?
Prices are expected to remain elevated till end 2027, although the pace of increases will moderate. Taiwan-based market intelligence firm TrendForce recently projected continued memory price increases, albeit at lower rates. Analysts point to a structural shortage rather than a traditional cyclical spike because memory makers continue reallocating capacity toward AI-related products.
Relief will depend on availability of new capacity and a better balance between AI and conventional demand. While conditions may gradually improve during 2027, analysts do not expect a meaningful return to abundant supply until large new investments begin to materially expand memory chip output later in the decade.
Shelley Singh
Shelley Singh is a Delhi based technology and business journalist with more than two decades of writing and reporting experience on a spectrum of issues. He has a Masters in Physics from Delhi University and MBA from Deakin University, Australia (distance learning). He has closely followed the growth of the technology sector and has been actively writing on topics like Artificial Intelligence (AI), outsourcing, IT services, hi-tech manufacturing and so on. Shelley has written across publications including Mint, The Times of India, The Economic Times, Businessworld, Financial Express, Outlook Money. He has also won several journalism awards including the Times Group Chairman’s award, the British Chevening Scholarship, Shriram Journalism Award, Polestar award and was the first winner from India of the Citi Journalistic Excellence Award, Columbia University.