Sonos Inc

NEW YORK – A global shortage of dynamic random-access memory (DRAM) is forcing a structural price correction across the consumer electronics sector, leading to immediate retail increases for high-end tablets, computers, and gaming consoles.

The crisis stems from a systemic reallocation of semiconductor production capacity. As artificial intelligence chipmakers, most notably Nvidia, demand ever-increasing volumes of specialized memory for AI processors, the available supply of standard DRAM for consumer hardware has contracted sharply. DRAM – the working memory inside everything from phones to game consoles – is a foundational component of modern computing, and most consumer devices cannot be shipped without it.

This supply-demand imbalance has created a stark economic divide between “hyperscalers”-companies with massive cash reserves and direct supplier leverage-and smaller hardware original equipment manufacturers (OEMs) facing potential insolvency. It is also drawing fresh scrutiny from policymakers who spent the last several years underwriting new U.S. chip capacity through the CHIPS and Science Act, only to see critical memory now priced out of reach for swaths of the downstream tech ecosystem.

Margin compression and retail hikes

On June 25, 2026, Apple increased prices for a wide array of iPads and Macs. The company stated it has “never seen a component price increase this much, this quickly,” and warned in an internal memo that DRAM has become the single largest swing factor in the bill of materials for several flagship products.

“The memory situation [is] a hundred-year flood,” said Apple CEO Tim Cook.

Hours after Apple’s announcement, Microsoft raised the price of the Xbox Series S by $100, bringing the retail cost to approximately $500. In a corporate blog post, Microsoft noted that consoles are typically sold for less than their production cost, and that console storage and memory prices have already increased by more than 2.5x. The company projects another doubling of these costs by the fall of 2027 if current supply conditions persist.

While these giants can pass costs to consumers or absorb them temporarily to defend market share, smaller firms lack the pricing power to combat global inflationary trends. For them, DRAM is a non-negotiable input that now threatens basic viability rather than just quarterly margins.

• GoPro: The action camera manufacturer warned this month of a “going concern” risk after memory costs surged between 80% and 115% at the end of the first quarter, undermining a multiyear effort to stabilize profitability.
• Sonos: Shares of the speaker maker have declined 23% this year as memory prices erode margins and constrain its ability to hold promotional pricing in key retail channels.
• Mono Technologies: The startup reported its cost for 8 gigabytes of DRAM from Micron rose from $35 during initial development to $300 on recent orders, effectively blowing up its original consumer price point.

Nabila Popal, an analyst at IDC, characterized the situation as an “absolute existential crisis” for local players and manufacturers of low-cost Android devices under $100, noting that suppliers are prioritizing large-scale contracts over smaller orders. In practice, that means flagship phones for global brands continue to ship, while entry-level devices aimed at emerging markets and public-sector procurement risk being delayed or cancelled.

The supplier windfall

The crisis for OEMs has translated into record profitability for memory producers. Micron, a dominant force in the DRAM market, reported a massive surge in financial metrics in its quarterly earnings report released June 24, 2026, citing tight inventories and long-term contracts with hyperscale cloud providers.

Sumit Sadana, Micron’s chief business officer, confirmed the company has established long-term supply agreements with major smartphone and PC firms to manage the allocation of scarce volumes. Those contracts, executives say, are intended to provide planning certainty on both sides – but they also lock in preferential access for the largest buyers, leaving everyone else to compete on the spot market at far higher prices.

Industry lobbyists argue that this dynamic undercuts the intent of recent industrial policy, which sought to broaden and secure access to advanced chips rather than intensify concentration around a handful of cloud platforms and device makers.

Industrial and defense spillover

The shortage has extended beyond consumer electronics into specialized industrial and defense sectors, where DRAM sits inside routers, test equipment, and mission-critical communications systems.

W5 Technologies, which produces communications equipment for defense contractors, reports severe lead-time delays and cost spikes that are now feeding into procurement schedules. Elaine Ferguson, co-founder of W5, noted that a server used in a satellite communications simulator cost $5,373 in 2020. By earlier this year, that price rose to $8,839, and a subsequent order for the same unit was priced just under $15,000.

Delivery windows have similarly collapsed; equipment expected in May is not anticipated until August, forcing customers to rework training timetables and deployment plans.

A coalition of lobbyists representing telecommunications, medical device, and retail industries recently sent a letter to the Department of Commerce expressing concern over these price increases and warning of knock-on effects for broadband rollouts, connected health equipment, and payment infrastructure. Officials are under pressure to decide whether existing tools – including export controls, strategic stockpiles, and incentives for new memory fabs – can be adapted to stabilize the DRAM market without distorting it further.

Mono Technologies is currently seeking new investment to fund a larger production run while developing a new model to mitigate DRAM costs, such as lowering baseline memory configurations and pushing more functionality into software. GoPro has warned investors that planned reductions in memory production from its suppliers are expected to lower projected sales volumes, underscoring how a component most consumers never see on a spec sheet is quickly becoming one of the most politically sensitive building blocks in the global tech economy.