A global memory shortage driven by AI servers could slash phone, PC and TV output by 2026, putting pressure on consumer electronics brands worldwide.
Why AI Demand Is Squeezing the Memory Market
The rapid expansion of artificial intelligence is putting unprecedented pressure on the global memory market, raising alarms for the wider consumer electronics industry. According to comments attributed to Phison CEO Pua Khein-Seng in a Chinese-language interview, the surge in AI demand for high-performance storage could push many system vendors into bankruptcy or force them to drop entire product lines by the end of 2026.
While the original remarks have been summarised and translated by third parties and cannot be verified word for word, the underlying concern is clear: there is simply not enough NAND and DRAM capacity to satisfy both the booming AI server market and traditional consumer devices at the same time. As cloud providers and hyperscale data centres race to deploy more powerful AI infrastructure, they are locking in long-term contracts for huge volumes of memory, effectively crowding out smaller players in the hardware ecosystem.
This imbalance is already visible in sharply rising memory prices and extended lead times for orders. When key components become scarce and expensive, manufacturers of phones, laptops, TVs and other gadgets face a difficult choice: absorb higher costs, raise prices, cut features or scale back production altogether.
What It Could Mean for Phones, PCs and TVs
According to the summary of Pua’s remarks, consumer electronics could see widespread disruption from late 2025 through 2026. Mobile phone production alone could reportedly fall by 200 to 250 million units, with notable declines also expected in PCs and televisions if the memory squeeze continues.
For everyday consumers, that could translate into fewer model choices on shelves, longer replacement cycles and less aggressive discounting on older devices. Some brands may prioritise their flagship or premium lines, cutting back on low-margin budget models that are more sensitive to component price swings. Smaller or weaker companies with limited bargaining power in the supply chain could be pushed out altogether.
The shortage also complicates innovation timelines. Features that depend on larger storage capacities or higher memory bandwidth may be delayed or reserved only for top-end products, as brands try to stretch limited components across multiple segments. In extreme cases, manufacturers might cancel planned devices if the business case no longer makes sense under elevated memory costs.
How NVIDIA’s Rubin GPUs Could Intensify the Shortage
One of the biggest drivers of this imbalance is the shift of memory demand towards AI accelerators and data centre infrastructure. The next generation of Nvidia Rubin GPUs, designed for large-scale AI workloads, is a prime example. Pua’s translated comments suggest that if tens of millions of Rubin units ship, and each system requires more than 20 terabytes of solid-state storage, those deployments alone could consume around 20 percent of last year’s total global NAND output.
That estimate does not even account for additional storage needed for backup, replication, model versioning and user data. When AI clusters consume such a big share of the world’s flash production, traditional consumer devices are forced to compete for whatever capacity remains. In effect, the centre of gravity in the memory market shifts from retail gadgets to hyperscale AI platforms.
Industry reports also suggest that memory makers are now asking for multi-year prepayments from their largest customers to secure supply – something described as unprecedented in the sector. This favours deep-pocketed cloud and AI players over smaller electronics brands that cannot commit to such long-term, upfront deals.
Why New Chip Factories May Not Solve the Crisis Quickly
Major memory producers such as Samsung, Micron, SK Hynix, Kioxia and Yangtze Memory have announced new capacity investments, but the impact will not be immediate. Building, equipping and ramping up a modern fab typically takes at least two years, and the tools required for advanced NAND production are themselves in tight supply.
Even with China adding extra output, early-stage capacity is expected to cover only a small share of global demand – estimates in the translated summary suggest roughly 3 to 5 percent – leaving a projected supply gap of 10 to 20 percent in the coming years. Strong domestic demand within China further reduces the likelihood of significant surplus for export in the short term.
Some observers note that one side effect of constrained supply could be longer product lifespans and a greater emphasis on repair and refurbishment. However, overall electronics production is still shifting towards energy-intensive AI servers and GPU clusters rather than shrinking. Unless memory output catches up with this structural shift, pressure on consumer electronics is likely to remain.
For now, the message for the market is cautious: the AI boom is not just reshaping software and services, it is also rewiring the hardware supply chain. If forecasts of prolonged memory tightness prove accurate, the next few years could see winners and losers emerge not just based on innovation, but on who can secure the chips and storage they need to keep shipping products.
