In June 2026, Apple raised the price of some MacBooks and iPads by nearly 20%, blaming an "unprecedented" surge in component costs. Xbox announced its second console price hike in less than a year, raising the basic model by $100 to $499, and Valve launched its Steam Machine at £879—75% more than a PlayStation 5—citing soaring memory and storage expenses. The common culprit: a global crunch in the chips that power almost every modern gadget, driven by the insatiable appetite of artificial intelligence.
These price rises come down to two key components: DRAM (dynamic random access memory) and NAND flash storage. These chips are essential in everything from laptops and phones to games consoles and smart speakers. In recent months, their prices have skyrocketed because AI data centres—which require vast amounts of memory to train and run AI models—have been buying up most of the supply. According to industry tracker TrendForce, DRAM prices rose up to 98% in the first quarter of 2026 alone and were expected to jump another 58-63% in the second quarter. Memory makers like Micron have prioritised orders from AI chipmakers such as Nvidia, leaving consumer electronics firms scrambling for chips.
“Explains why electronics prices are rising due to a chip shortage driven by AI data centres.”
This is not a sudden crisis, but the result of a longer-term shift. For years, the price of computer components tended to fall over time as manufacturing improved. But the AI boom changed that. As companies like OpenAI, Google and Microsoft race to build more powerful AI models, they need ever-larger data centres packed with servers. Those servers consume enormous quantities of memory chips, creating an imbalance between supply and demand that has pushed up prices across the board. Apple said it had "never seen a component price increase this much, this quickly". Xbox noted that the cost of memory and storage had already more than doubled, and it expected costs to double again by 2027. Valve admitted its original pricing goal for the Steam Machine "is no longer viable".
For UK consumers, the practical impact is already being felt. A MacBook Air with 512GB of storage went up by $200 (£150). The Steam Machine costs £879, while its handheld sibling, the Steam Deck, saw a 40% price increase earlier in 2026. If you are thinking of buying a new laptop, tablet, console or even a phone, you may face higher prices than you would have a year ago. Analysts also expect iPhone prices to rise next. Some companies, like phone maker Nothing, have cancelled product releases altogether because the economics no longer work. The trend is broad: tech analyst Paolo Pescatore said Apple's actions demonstrated the challenge "even for the world's biggest technology companies".
Here are some key questions readers might have:
Q: Why are chip prices rising so much? A: The main cause is surging demand from AI data centres. Companies like Nvidia have signed long-term deals with memory makers, diverting supply away from consumer electronics. This has led to what some experts call "Ram-ageddon".
Q: Will my iPhone get more expensive? A: Apple has so far only raised prices on iPads and MacBooks, but analysts expect iPhone hikes to follow. IDC's Nabila Popal said "the iPhone isn't spared. Its hike is coming."
Q: Are consoles and gaming PCs affected? A: Yes. Xbox raised the price of its basic console by $100 to $499, and its higher-storage model by $150 to $749. Valve's Steam Machine costs £879, and its Steam Deck handheld also rose by 40%.
What happens next depends on whether the supply-demand imbalance eases. Memory makers are racing to increase production, but that takes time. Meanwhile, analysts warn that prices could stay high or rise further. Xbox's statement that it expects storage costs to double again by 2027 suggests more price hikes may be on the horizon. The AI boom shows no signs of slowing, meaning the chip squeeze—and its cost to consumers—could persist for years.