AI Data Center DRAM Shortage Drives 30% Cost Hike, Nintendo to Add $50
AI-driven demand has redirected high-bandwidth DRAM supply to data centers, pushing memory costs up over 30% and inflating Google’s hardware spending. Console makers raised prices—Xbox Series X jumped from $499 to $649, PS5 saw significant hikes—and Nintendo will add $50 to Switch systems from September, risking lower holiday sales.
1. AI Boom Fuels Memory Shortage
Rapid growth in AI workloads has driven data center operators to secure high-bandwidth DRAM for GPU clusters, drawing supply away from consumer electronics. This surge has led memory manufacturers to prioritize lucrative data center contracts, leaving PC, smartphone and console producers with tighter inventories and higher prices.
2. Impact on Google’s Data Center Costs
As one of the largest purchasers of high-bandwidth memory for its AI and cloud services, Google faces rising hardware expenses that could increase capital spending by several hundred million dollars. Elevated component costs may compress margins on cloud services and delay planned infrastructure expansions if supply constraints persist.
3. Console Price Hikes and Nintendo Outlook
Microsoft and Sony have already passed surcharges to gamers, with Xbox Series X leaping from $499 to $649 and similar PS5 increases. Nintendo will implement a $50 Switch price rise on September 1 ahead of the holiday season, a move that could dampen unit sales and weaken hardware revenue in its key U.S. market.
