Tesla CEO Elon Musk, Apple CEO Tim Cook, Xiaomi President Lu Weibing and many others are warning about a global crisis unfolding: Shortage of memory chips. The scarcity of memory chips led to their soaring costs. As a report in Bloomberg says it is beginning to hammer profits, derail corporate plans and inflate price tags on everything from laptops and smartphones to automobiles and data centers — and the crunch is only going to get worse.As per the Bloomberg report, the main driver of the squeeze is the buildout of AI data centers. Companies like Alphabet and OpenAI are buying millions of Nvidia AI accelerators, each needing a massive amounts of DRAM. This has left the consumer electronics maker fighting over dwindling supplies from Samsung and Micron. Elon Musk has also suggested that Tesla may need to build its own fabrication plant, “We’ve got two choices: hit the chip wall or make a fab,” he said in January.

Price spikes and “RAMmageddon”

The report also adds that the memory prices are increasing and going at an unprecedented levels. One of the type of DRAM jumped by 75% in a single month, with retailers adjusting prices daily. Industry insiders have dubbed the crisis “RAMmageddon.” Tim Cook warned that iPhone margins will be compressed, while Micron called the bottleneck “unprecedented.”

Industry fallout due to global chip crisis

The report also revealed the industry fallout on the global chip crisis. The report adds that Sony may delay its next PlayStation console to 2028 or 2029. Also, Nintendo is also thinking raising the prices of Switch 2. Xiaomi and Oppo may also cut shipment forecasts for 2026. Cisco cited the memory squeeze in a weak profit outlook, triggering its worst share loss in nearly four years. Lastly, Qualcomm and Arm Holdings also warned of more fallout.

Echoes of past supply chain shocks

This global chip crisis recall the Covid-era chip shortages, but this time the driver is AI. Tech giants Meta, Amazon, Microsoft and Google are pouring hundreds of billions into AI infrastructure, diverting memory production toward high-bandwidth memory (HBM) for AI accelerators. That leaves less capacity for standard DRAM used in everyday electronics.Bernstein’s Mark Li says memory prices are going “parabolic.” Lenovo CEO Yang Yuanqing warned the crunch will last at least through the year. Counterpoint Research estimates DRAM shortages will persist across electronics, telecom, and automotive industries, with signs of panic buying already visible.