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AI's Role in Chip Price Rise
The advanced chip market has experienced an unprecedented surge in demand for memory chips and AI processors, leading to a significant increase in the prices of dynamic random-access memory (DRAM) and high-bandwidth memory (HBM). AI memory consumption has been growing exponentially, driven by higher demand from data centers, whose capacities have risen from around 10 terabytes in 2020 to approximately 18 exabytes. This demand surge has been met with supply shortages caused by supply chain challenges, prompting companies to raise product prices by up to 20%. As a result, it is projected that by 2027, memory shortages will affect about 58 million computers and 134 million smartphones. The memory market is expected to grow from $220 billion to $890 billion, which is exerting pressure on consumer electronics prices and leading companies to pass increased costs on to consumers.
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