AI Memory Costs Continue to Explode — And It’s About to Get a Lot Worse

AI Memory Costs Continue to Explode — And It’s About to Get a Lot Worse

Rich Duprey

Fri, September 18, 2026 at 7:02 PM GMT+3 3 min read

Quick Read

• Intel (INTC) CEO Lip-Bu Tan warned memory prices jumped 5x to 7x, now making up ~75% of cost for some lower-end phones and laptops.

• Micron's $100 billion in take-or-pay contracts and $22 billion in customer deposits lock in floor pricing above prior peak margins through the shortage.

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Intel CEO Lip-Bu Tan set off a fresh scramble in chip stocks this week, warning that memory prices have jumped 5x to 7x and that memory now accounts for roughly 75% of the cost of some lower-end phones and laptops. He cautioned the shortage could deepen in 2027.

What's Driving the Squeeze

Tan told investors the "industry is facing one of the most severe supply constraints in its history across leading-edge logic, silicon wafers, memory, and subscripts" and that these shortages will persist for the foreseeable future. Intel (NASDAQ:INTC) is already pivoting production toward data-center CPUs and now guides 2026 CapEx above $20 billion, with 2027 spending set to run significantly higher. Micron Technology (NASDAQ:MU) echoed the outlook, saying "we see tightness continuing beyond 2027", aligned with SK hynix flagging 2027 as potentially the industry's worst supply year.

Market Reaction Is Loud

Micron trades at $991.49, up 247.61% year-to-date. SK hynix (NASDAQ:SKHY) ADSs sit at $183.70, up 18.04% in the past month. Intel has ripped 190.6% YTD to $107.23. Micron's fiscal Q3 gross margin hit 84.9% on DRAM pricing gains in the low 60s percentage range and NAND pricing in the mid-80s percentage range.

Profit Angle to Watch

Memory suppliers hold the leverage. Micron's $100 billion in take-or-pay RPO and $22 billion in customer deposits and letters of credit lock in floor pricing above prior peak margins. Keep an eye on HBM4E qualification milestones and any 2027 CapEx revisions from Intel, which telegraph how tight next year gets for every buyer of PCs, phones, and AI servers.

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