Memory Shortage to Cause PC and Smartphone Market Contraction in 2025

Anticipating the Impact: Memory Shortage Reshapes Tech Landscape

Shrinking Markets: A Look Ahead to 2025

Industry analyst firm Trendforce has recently revised its outlook for 2025, now forecasting a decline in both the personal computer and smartphone sectors. Originally anticipating modest growth, the firm now predicts a 2.4% shrinkage for the PC market and a 2% reduction for smartphones. This adjustment primarily stems from a critical shortage in memory supply, a component integral to the functionality and cost of modern electronics.

The Rising Cost of Memory and Its Device Impact

The cost of memory, particularly RAM modules, has seen a substantial increase, with 16 Gb DDR5 chips more than doubling in price recently. Given that memory constitutes a significant portion of manufacturing costs—25% for AI PCs and 18% for smartphones—these rising prices are expected to translate into higher retail costs for consumers. Trendforce suggests that laptop prices could see an increase of 5% to 15% in response to the already observed 75% hike in RAM module prices, and further increases are possible if memory costs continue their upward trajectory.

Tech Giants Respond to Supply Chain Pressures

In anticipation of further market volatility, major players in the technology industry, including companies like Asus and Apple, are reportedly engaging in strategic procurement of DRAM and NAND memory. This proactive approach aims to secure essential components amidst the scarcity. Additionally, these companies are reevaluating their product portfolios, with reports suggesting a discontinuation of lower-margin products to focus resources on more profitable offerings in a challenging market environment.

Current Market Dynamics vs. Future Price Hikes

Despite the grim predictions, current retail prices for PC systems have not yet shown a dramatic surge. Consumers have even recently seen attractive deals, such as a high-end gaming laptop with an RTX 5070 Ti GPU being offered at a surprisingly low price. However, experts warn that these current prices might soon become a thing of the past. If the memory crisis deepens and the cost of components continues to climb, today's prices could be perceived as bargains in the near future.

Black Friday 2025: A Potential Last Chance for Deals

With major sales events like Black Friday on the horizon, the looming memory crisis creates an interesting dynamic. Retailers might have existing inventory acquired at pre-crisis prices, potentially leading to competitive deals. However, if forward orders are already reflecting the increased memory costs, there may be less incentive for deep discounts on current stock. This suggests that Black Friday 2025 could represent a critical window for consumers to purchase PC hardware before a potential widespread increase in prices takes hold for an extended period.

Broader Implications for the Gaming and Console Industries

The ripple effects of the memory shortage are not confined to PCs and smartphones. The gaming industry, heavily reliant on advanced memory for consoles and high-performance gaming PCs, could also face significant challenges. There's speculation about potential price adjustments for gaming consoles and new PC gaming hardware, such as Valve's rumored Steam Machine. The overall consensus is that the coming months will be crucial in determining the extent of the impact on the broader electronics market, with Black Friday possibly marking a turning point for consumer spending on tec