A global shortage of memory, particularly high-bandwidth memory (HBM) used in AI chips, has led to a sharp rise in prices and widespread supply constraints, with industry leaders warning of a critical bottleneck. The surge in demand is driven by the explosive growth of artificial intelligence, especially large language models, which require massive amounts of fast, specialized memory to operate efficiently. Three major memory manufacturers—Micron, SK Hynix, and Samsung Electronics—dominate the market, and their businesses are reaping the benefits. Micron’s stock has surged 247% over the past year, and the company reported nearly tripling its net income in the most recent quarter. Samsung expects its December quarter operating profit to nearly triple, while SK Hynix is considering a U.S. listing as its South Korean stock soars. In October, SK Hynix announced it had already sold out its entire 2026 HBM production capacity. TrendForce, a leading memory market analyst, forecasts a 50% to 55% increase in average DRAM prices in the first quarter of 2026 compared to the final quarter of 2025—described by analyst Tom Hsu as "unprecedented." The reason? AI chips, especially those from Nvidia and AMD, are consuming memory at an extraordinary rate. These chips are surrounded by HBM, a high-speed, stacked memory technology that delivers the bandwidth needed for AI workloads. Nvidia’s latest Rubin GPU, now in production, comes with up to 288GB of next-generation HBM4 memory, distributed across eight visible blocks. When 72 of these GPUs are combined into a single server system called NVL72, the result is a machine with a staggering 20TB of HBM. In contrast, consumer devices like smartphones typically use just 8 to 12GB of lower-speed DDR memory. HBM is not just faster—it’s more complex. Micron stacks 12 to 16 layers of memory into a single chip, creating a "cube" that requires precision manufacturing. But this process comes at a cost: for every bit of HBM produced, Micron forgoes the ability to make three bits of standard memory used in laptops and other devices. "As we increase HBM supply, it leaves less memory left over for the non-HBM portion of the market," said Micron’s business chief, Sumit Sadana. The industry is now prioritizing AI and server markets, where demand is growing fastest and customers are less price-sensitive. In December, Micron announced it would exit its consumer PC memory business to redirect supply toward AI and data center needs. The impact is already being felt in consumer electronics. Dean Beeler, co-founder of Juice Labs, recently paid $300 for 256GB of RAM—maximum capacity for current consumer motherboards. Just months later, he noted on Facebook that the same amount of memory would now cost about $3,000. The problem is rooted in what experts call the "memory wall"—a performance bottleneck where AI chips are outpacing the speed and capacity of available memory. While GPUs have become faster, memory has not kept pace, leaving powerful processors waiting for data. "Your performance is limited by the amount of memory and the speed of the memory that you have," said Sha Rabii, co-founder of Majestic Labs. "Adding more GPUs won’t help if memory is the bottleneck." The shortage is now affecting major tech companies. Apple’s finance chief downplayed the issue, calling it a "slight tailwind," but Dell has confirmed that memory costs are rising and will likely lead to higher product prices. COO Jefferey Clarke said the company is adjusting its product configurations to mitigate the impact, but acknowledged that consumers will ultimately bear the cost. Even Nvidia, the biggest buyer of HBM, faces scrutiny. CEO Jensen Huang admitted the company’s AI-driven demand is straining the supply chain, but said the industry is responding with new factory projects. Micron is building two new fabs in Boise, Idaho, set to open in 2027 and 2028, and a third in Clay, New York, expected to come online in 2030. But for now, Sadana said, "we're sold out for 2026."