An Xbox console that cost $499 last year now sells for $749. A MacBook Air with 512GB storage is $200 more expensive than it was yesterday. And Nintendo has announced it will raise the price of its Switch 2 globally from September. Across the consumer electronics industry, prices are going up – and the culprits are memory chips and the AI boom.
At the heart of the problem are two tiny but essential components: dynamic random access memory (DRAM) and NAND flash storage chips. These are the parts that store data and let devices run multiple tasks at once. For years, they became steadily cheaper. But in 2026, that trend has reversed dramatically. According to industry tracker TrendForce, prices of DRAM rose as much as 98% in the first three months of the year and are expected to jump another 58%–63% in the second quarter. Apple said it has “never seen a component price increase this much, this quickly”. The company raised prices on iPads and MacBooks by nearly 20% in late June, after absorbing costs for months. Xbox followed with its third console price hike in just over a year, bringing the total increase to 30%–40% compared with a year ago.
“Why Apple, Xbox and others are hiking prices due to AI-driven memory chip shortages and soaring costs.”
The reason? An extraordinary surge in demand for chips to power AI data centres. Companies like Nvidia are signing long-term deals with memory makers, who are prioritising those high-margin orders over the consumer electronics market. The result is what some analysts have dubbed “Ramageddon” – a supply squeeze that leaves gadget makers competing for a shrinking pool of chips. “It’s the most disruptive supply-side event the smartphone industry has ever faced,” said Yang Wang, principal analyst at Counterpoint Research. Even the world’s most valuable consumer electronics firm, Apple, with its famously tight supply-chain relationships, could not shield customers forever.
For UK buyers, the impact is immediate. The price of a new Xbox Series X will rise by at least $100 (around £75) from August, and older models no longer get cheaper – they get more expensive. Apple’s cheapest laptop, the Neo, now starts at $699 instead of $599. Price hikes have also hit Valve’s Steam Deck (up 40% since May) and the HomePod smart speaker. Many analysts expect the iPhone to be next. “The iPhone isn’t spared. Its hike is coming,” said Nabila Popal of IDC, noting Apple likely timed its iPad and MacBook increases before the autumn iPhone launch to avoid negative headlines.
Q: What is DRAM and why does it matter? DRAM (dynamic random access memory) is a type of memory that temporarily stores data your device needs right now – like open apps or browser tabs. It’s in almost every electronic device, from phones to laptops to game consoles. Its price surge has forced companies to raise prices on finished products.
Q: Why is AI causing chip prices to rise? AI data centres require huge numbers of powerful chips – especially memory chips – to process and store vast amounts of data. Memory makers like Micron have prioritised these high-volume orders over consumer device makers, creating a shortage that drives up prices for everyone else.
Q: Will device prices ever come back down? Xbox said it expects memory and storage costs to double again by 2027, suggesting further price rises are likely. Analysts say prices may stabilise if memory makers increase production capacity, but that takes years. For now, the trend is upward.
What happens next depends on how quickly chipmakers can expand supply. TSMC, the world’s largest chip foundry, has not ruled out its own price increases due to inflation. Apple’s share price fell nearly 5% after its announcement, and Dell dropped more than 8%. Consumers should expect more price hikes on gadgets this year – and possibly on the iPhone when it launches this autumn.