2 weeks ago
RAM Prices Surge as AI Demand Squeezes Memory Supply
RAM is a type of computer memory that helps devices work quickly.
Reports say some RAM prices have become about five times higher in one year.
Large AI data centres need huge amounts of memory to run their computers.
This leaves less memory for ordinary computers, phones and other electronics.
Zoho founder Sridhar Vembu says the higher costs are making it harder to run a software business.
Zoho has not raised its prices yet, but Vembu says that is becoming difficult.
He believes software should be designed to use less memory.
He also wants smarter programming tools and compilers, including for AI.
Prices may stay high if AI companies keep building data centres faster than manufacturers can increase supply.
Reported DDR5 memory prices rose about 500% over 12 months, with some kits reaching roughly 10 times historical lows.
A 64GB DDR5-5600 kit reportedly increased from under $200 to more than $1,100, while a 128GB kit reached $3,399.
AI data centres are absorbing large amounts of DRAM and competing with PC and smartphone manufacturers for supply.
Zoho founder Sridhar Vembu says higher memory and AI token costs are making operations difficult, although Zoho has resisted raising prices.
Vembu is calling for more memory-efficient programming languages and smarter compilers as AI companies expand data-centre investment.
- Who
- Zoho founder Sridhar Vembu, memory manufacturers, AI companies and consumer-electronics makers.
- What
- Memory prices have reportedly surged as AI data centres compete for DRAM supply, increasing pressure on businesses and consumers.
- Where
- The pressure is affecting the global memory market, with major data-centre projects planned in Ohio and India.
- When
- The reported increase occurred between August 2025 and August 2026; Vembu commented on the trend in posts on X.
- Why
- Growing AI infrastructure demand is absorbing memory supply and encouraging companies to secure capacity in advance.
AI Expansion Advocates
Efficiency and Caution Advocates
Responding to higher demand
AI Expansion Advocates
AI companies and investors are continuing to fund large data-centre projects, while memory manufacturers benefit from strong AI-related demand.
Efficiency and Caution Advocates
Sridhar Vembu argues that software should use memory more efficiently instead of assuming that abundant, inexpensive memory will always be available.
Handling higher costs
AI Expansion Advocates
Rising component costs may be passed on to customers, as several smartphone makers have already raised prices and Apple is reportedly considering an increase.
Efficiency and Caution Advocates
Zoho has so far resisted raising prices, although Vembu says maintaining that approach is becoming increasingly difficult.
Long-term AI outlook
AI Expansion Advocates
The reported booking of future memory capacity and continued data-centre construction suggest that AI demand may remain strong.
Efficiency and Caution Advocates
Vembu cautioned that even real and widely used technologies can produce investment bubbles, comparing the situation with the 1995–2000 telecom boom and subsequent failures of telecom-equipment companies.
Key facts
- Reported price increase
- Memory prices rose about 500% in 12 months and reached roughly 10 times their lowest-ever level.
- Average DDR5 price
- Prices for certain kits reportedly rose from $90 in August 2025 to $425 in August 2026.
- 64GB DDR5-5600 kit
- The reported price increased from less than $200 to more than $1,100.
- 128GB DDR5-6400 kit
- The reported price reached $3,399, compared with an all-time low of $329.
- Zoho response
- Sridhar Vembu said Zoho had resisted raising prices, but higher memory and AI token costs were making operations challenging.
- Data-centre projects
- OpenAI and SoftBank's SB Energy plan a 10-gigawatt Ohio data centre; HCLTech announced a 3.5 billion-rupee investment, while TCS plans up to $7 billion for a 1-gigawatt facility.
- Supply outlook
- DigiTimes reportedly said 2027 RAM production capacity was effectively booked, while SK hynix CEO Kwak Noh-jung warned that supply could remain tight.
Quotes
Sridhar Vembu
Founder and CEO of Zoho
“"Memory prices, along with AI token prices have made business very difficult. We have held back from raising prices but it is becoming hard."”
thehansindia.com
freepressjournal.in
“"A technical note: for a long time, programming languages were designed with the assumption that memory is ‘free.’ That era has now ended."”
thehansindia.com
freepressjournal.in
Sources
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