By Mark Seavy

Suppliers across memory-hungry products (including items that use DRAM and NAND) are faced with raising retail prices or canceling orders amid up to a 400% surge in prices this past year.

Those increases—which apply to everything that uses memory, from toys to electronics—largely stem from manufacturers like Samsung, SK Hynix, and Micron reallocating production away from consumer memory and putting it toward the artificial intelligence (AI) that is being deployed in data centers. The result is a shortage of memory, which even before the current tight supply was subject to pricing that fluctuated daily.

For example, a 32-gigabyte (GB) memory kit that sold for $100-$200 in October 2025 is now going for $350. The memory market has long been subject to cycles in which prices rise during shortages, causing suppliers to increase production to meet demand only to have business cool and prices fall as the memory chips hit the market. But this time, AI appears to have broken that cycle in creating a boom for specialized memory chips that can speed data into products faster and more efficiently.

These higher prices also come after a year in which licensed and non-licensed product suppliers were forced to raise wholesale prices or absorb cost increases tied to a wave of tariffs on goods imported into the U.S. For products carrying licensed brands, that was in addition to having to pay royalties and minimum guarantees.

In the case of licensed brands, the higher memory prices have forced some suppliers to cancel product plans. One brand owner reported they had to cancel three agreements for cellphones after potential licensees were unable to secure enough memory.

“The cellphone deals went belly up because nobody can make any money because of memory concerns,” the executive said. “We are still making money from the TVs, but it is definitely a fight.”

Moving forward, industry experts don’t expect the memory issue will be resolved anytime soon.

Micron is negotiating prices every quarter and at the end of Q2 had 16 agreements carrying deposits totaling $22 billion, $18 billion of which was cash, said Sumit Sadana, Chief Business Officer at Micron. The total available market for memory is expected to cross $100 billion by 2028, and Micron is increasing its capital spending aimed at boosting production to $50 billion, up from $27 billion a year earlier, he said.

Demand from customers, including Apple and Nvidia, is 80% for DRAM and 20% for NAND, said Sadana. Demand for Micron’s memory chips is expected to be above supply through 2028, he said.

SK Hynix, which recently went public, has restructured long-term supply agreements to remove price caps. The change means contract prices will reflect a spot market driven by supply shortages and allow Hynix to maximize profitability.

“The memory constraint is supply-led for the foreseeable future and is not really determined by demand anymore,” Sadana said. “We don’t really see when supply is going to be able to meet demand.”

The response from product manufacturers has already been seen in the market.

Apple implemented price increases on its MacBooks and iPads ranging from $30-$1,300 in June and Nintendo will boost the retail price for its Switch 2 console by $50 effective September 1, reflecting the higher memory costs. Microsoft, meanwhile, is imposing price increases of $100-$150 for Xbox consoles effective August 1.

TV-centric memory costs have risen by 50% from a year ago, forcing most suppliers to boost prices in an ultra-competitive landscape dominated by brands like LG, Samsung, Hisense, and TCL.

On the toy side, many suppliers rely on microchips for sounds and other features, the cost of which in some cases has jumped 300%. Among the licensed suppliers, for example, Jazwares deploys microchips for sound in some of its Five Nights at Freddy’s and Fortnite products.

“Management [at Hynix] expects continued strong pricing and demand for DRAM, NAND, and high-bandwidth memory driven by AI infrastructure growth and will significantly increase capex to expand capacity while maintaining financial discipline,” a chip analyst said. “Usually, memory chip makers have reduced price volatility by offering price caps in exchange for securing long-term orders. However, memory suppliers have effectively restructured contracts to maximize profitability during periods of rising prices.”