Simon Willison’s Weblog

The memory shortage is causing a repricing of consumer electronics (via) David Oks provides the clearest explanation I've seen yet of why consumer products that use memory are likely to get significantly more expensive over the next few years.

The short version is that memory manufacturers - of which there are just three remaining large companies - have a fixed capacity in terms of how many wafers they can process at any one time. This fixed wafer capacity is then split between DDR - used in desktops and servers, LPDDR - used in mobile phones and low-energy devices, and HBM - used with GPUs.

Until recently, HBM got just 2% of that wafer allocation. The enormous growth in AI data centers has pushed that up to an expected 20% by the end of 2026, and "a single gigabyte of HBM consumes more than three times the wafer capacity that a gigabyte of DDR or LPDDR does".

Memory companies have learned from the extinction of their rivals that you should always under-provision rather than over-provision your fabricator capacity. The profit margins and demand for HBM (high-bandwidth memory) will constrain the production of consumer-device RAM for several years.

This is already being felt in the sub-$100 smartphone market, which is particularly important to markets like Africa and South Asia.

(The original title of the piece was "AI is killing the cheap smartphone" but I'm using the Hacker News rephrased title, which I think does more justice to the content.)