The era of affordable laptops, phones, and games consoles may be coming to an end, not because of technological advances, but due to soaring component costs. Major manufacturers including Microsoft, Samsung, and Dell have begun raising prices and discontinuing budget models, making devices under £400 increasingly scarce.
The root cause is a shortage of memory chips, dubbed “RAMageddon” by tech press. Unlike typical shortages caused by conflicts or material scarcity, this one stems from the explosive growth of artificial intelligence (AI) and the datacentres it relies on. These facilities consume vast quantities of high-end memory chips, diverting supply away from consumer electronics.
Analyst firm TrendForce estimates that prices for mainstream laptops, typically costing around $900 (£667), could rise by as much as 40% in 2026. The shortage has also constrained flash storage chips used in SSDs, as manufacturers prioritise higher-margin AI memory. Lower-end processors are similarly affected, with production shifted to meet AI demand.
Budget devices are hit hardest, as memory accounts for up to 30% of a budget smartphone’s cost and 23% of an entry-level laptop. “This sharp increase removes vendors’ ability to absorb costs, making low-margin entry-level laptops non-viable,” said Ranjit Atwal of Gartner. He predicts the sub-$500 (£370) PC segment will disappear by 2028.
Manufacturers have responded by raising prices and phasing out cheaper models. Apple increased the MacBook Air’s starting price by £100 while doubling storage; Microsoft added £170-£200 to Surface computers; Sony raised the PS5 by £90; and Meta added £30 to its Quest 3S VR headset. Samsung and other smartphone makers have also announced price hikes.
With datacentre builders securing chip supply for years and new manufacturing capacity not expected until 2027 at the earliest, the shortage is set to persist. SK Hynix forecasts it could last until 2030. Consumers are advised to buy sooner rather than later, consider older models, or explore refurbished electronics as cheaper, eco-friendly alternatives.
