Could a memory chip ‘bottleneck’ cause laptop and phone prices to go through the roof?

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The market has been dominated by just three main players — Samsung Electronics Co. Ltd., SK Hynix Inc. and Micron Technology Inc. — limiting the ability of the industry to rapidly scale up production.

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As well, Micron announced in December it would be exiting the consumer market after the second quarter of 2026 to dedicate production capacity to support AI data centre demand.

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How long could the shortage last?

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It’s difficult to determine how long this shortage could persist. “I don’t see it as a transient supply shock,” Anani said. “I think it’s a more of a global manufacturing pivot in AI that will be with us for a period of time, meaning that supply chain tightness will be there for a couple of years until it readjusts.”

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Micron, Samsung and SK Hynix have warned the chip shortage could persist well past this year and Intel Corporation chief executive Lip-Bu Tan recently said there could be “no relief” until 2028.

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Increasing demand for memory chips is a trend that is not going to reverse, Gregori said.

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“These systems are going to require more and more data … so this increases the demand for memory chips.”

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What does this mean for consumer electronics?

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Memory prices will skyrocket by 40 to 50 per cent in the first quarter and another 20 per cent in the second quarter of 2026, according to Counterpoint Technology Market Research.

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University of Guelph’s Ray said he expects prices of consumer electronics to climb by at least 10 to 20 per cent, but this isn’t the only impact he foresees.

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Many smartphone companies frequently introduce new models with higher capacity, he said. With the memory chip shortage, Ray predicted some delays in introducing these new models, or production of new models with reduced capacity.

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Winder said some larger consumer electronics companies that have high margins might absorb some of or all the higher costs to avoid passing them onto consumers. However, smaller companies or those that offer products at lower prices are more likely to transfer these costs at higher price points to consumers.

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“If the chip inflation does keep up, (larger companies might) slowly increase the price of their devices,” Winder added. “But they’re also balancing a very tight rope because consumer confidence is not high right now.”

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Global smartphone sales could shrink by more than two per cent this year due to rising memory costs, according to a December forecast from Counterpoint.

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Some products may be more price elastic than others, said Ray. For example, demand for personal computers and tablets used in everyday work might be less impacted by higher prices than, say, a smart toaster that could be replaced by a regular toaster.

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“If you have a legacy technology that you can carry and you think the price increase (of a new product) is unfair, don’t pay that price,” said Ray.

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Anani said he expects to see higher prices take effect in a matter of months.

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Could the Canadian market be worse off than the U.S.?

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The memory chip shortage could exacerbate higher prices and shortages in Canada, which is a smaller market compared with the U.S., experts said.

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“When demand outweighs supply, normally your biggest customers get shipped first,” said Winder. “We’re not at the top of the pecking order.”

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Ray said he expects U.S. market demand will be prioritized first over Canada (with the exception of any contractual obligations). This could either trigger higher prices for consumer electronics in Canada or mean Canadians will not receive the newest or most upgraded products right away, he said.