SCOTT SIMON, HOST:
There's a RAM shortage at the moment. RAM, as in random access memory. The memory computer keeps immediately at hand, so it can perform tasks quickly. How can that be? Well, as with so much these days, it all comes down to chips and AI. We're joined now by Sean Hollister, senior editor at The Verge. Thanks so much for being with us.
SEAN HOLLISTER: Thank you for having me.
SIMON: Why the shortage?
HOLLISTER: Well, AI companies have decided that they need so much RAM that they are buying up the entire supply around the world so that they can power these future AI networks that they believe might be the future of all computing. One development over at a place like OpenAI might use 20%, 25% of the world's whole supply of the wafers that this RAM comes on. What that has done in the market is it has meant that anything that uses memory chips, those - the price of those memory chips, they have to pay three, four, even six times as much to get them. And so that's going to raise the price of everything else.
SIMON: Where are we experiencing this first?
HOLLISTER: We've already seen it happening with system builders who are creating their own PCs because you're buying the memory as a memory product.
SIMON: I've read that the gaming industry, and I don't mean Caesars Palace, but PlayStation and Steam are getting hit.
HOLLISTER: Yes, yes. Valve Corporation, which makes the Steam Deck gaming handheld, was about to release a living room gaming console. They have had to delay it, and then they have to rethink its entire pricing because of the RAM shortage. Sony may be delaying its next PlayStation into 2029. Soon, we're going to see it happening in phones as well. We saw it migrate from desktop PCs to laptops and now phones, especially mid-range phones. Your $500 phone might cost something like $600 later this year because 15- to 20% of the cost of that phone, the material cost of that phone, is in the memory that needs to go inside it.
SIMON: Will we see it - the effect - you mentioned phones. Will we see it, for example, in automobiles, refrigerators?
HOLLISTER: I expect to see it in some way in just about everything. If you have a smart fridge, that has memory in it. If you visit a hospital that needs new equipment, that new equipment is going to have memory in it. Some farm tractors have equipment in it. If you have a cable modem that brings your internet connection into your house and, say, you're renting that from Comcast or you're buying one of those, the memory - the kind of memory used in those routers and set-top boxes, that price - the price of that memory has gone up by about seven times.
SIMON: Can they step up production?
HOLLISTER: They have tried, but it takes years for these companies to build up new facilities. There will be some already coming online in 2028, but that's a couple of years from now. And the new ones, the new facilities that they want to build, they're not in a huge rush to build out lots of them 'cause they don't want to risk overproducing, creating a glut of memory, and then losing money because of that. They'd rather enjoy the profits.
SIMON: I mean, the way you describe it, everything's going to cost more.
HOLLISTER: I expect so, just like with the tariffs and the chip shortage before that, except here with memory, with all the components that are going to these AI servers, there's no specific end in sight. We don't know when the AI companies, the companies building out this - the biggest buildout in infrastructure we may have ever seen in the world. We don't know when that buildout is going to end. We don't know when their thirst is going to subside.
SIMON: Sean Hollister of The Verge. Thanks so much for being with us.
HOLLISTER: Thanks for having me.
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