AI Surge Drives Chip Prices Up: Automakers Warn of Rising Costs Ahead

Global memory prices are soaring due to AI datacenter demand, putting pressure on automakers and consumer tech

Published on Feb. 19, 2026

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A global shortage of DRAM memory chips is driving up prices, with AI datacenters stripping supply from the consumer electronics sector. Automakers like Ford and Tesla have warned that the chip crunch will soon lead to rising costs for vehicles, echoing concerns from tech giants like Apple about the impact on profit margins.

Why it matters

The memory chip shortage could have wide-ranging impacts, from higher prices for new cars and consumer electronics to potential delays in product launches. This highlights the growing dominance of AI and the strain it is placing on global semiconductor supply chains.

The details

Global memory prices are on the rise, driven by surging demand for DRAM (dynamic random access memory) from the booming AI datacenter industry. Companies like Google and OpenAI are buying chips at a staggering rate, causing brands like NVIDIA to shift production away from consumer-facing products. Experts warn this could be worse than the 2020 chip shortage, with Lam Research CEO Tim Archer saying "What is ahead of us between now and the end of this decade, in terms of demand, is bigger than anything we've seen in the past."

  • Ford's Chief Financial Officer Sherry House warned about rising memory prices at this year's Wolfe Research summit on automotive technology.
  • Tesla CEO Elon Musk has said the company may need to build its own DRAM fabrication plant to secure chip supply for its vehicles.

The players

Ford

A major American automaker that has warned about rising memory chip prices affecting its business.

Tesla

An American electric vehicle manufacturer whose CEO Elon Musk has said the company may need to build its own DRAM fabrication plant.

Lam Research Corp.

A semiconductor equipment supplier whose CEO Tim Archer warned that upcoming memory demand will "overwhelm all other sources of demand."

Apple

The tech giant whose CEO Tim Cook has said the demand for DRAM will harm iPhone profit margins.

Google (Alphabet)

The parent company of Google, which is one of the AI datacenter operators driving up DRAM demand.

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What they’re saying

“We've got two choices: hit the chip wall or make a fab.”

— Elon Musk, CEO, Tesla (Bloomberg)

“What is ahead of us between now and the end of this decade, in terms of demand, is bigger than anything we've seen in the past, and, in fact, will overwhelm all other sources of demand.”

— Tim Archer, CEO, Lam Research Corp.

“So this is something that we've been actively managing. We do believe at this point in time that we have access to sufficient supply, but we are seeing pressure on pricing, and that has gone into our forward plan.”

— Sherry House, Chief Financial Officer, Ford

What’s next

Automakers and consumer tech companies will likely need to pass on rising memory chip costs to customers, leading to higher prices for new vehicles and electronics. Some companies, like Tesla, may also explore building their own semiconductor fabrication facilities to secure supply.

The takeaway

The surge in AI-driven demand for DRAM memory chips is putting immense strain on global semiconductor supply chains, with ripple effects across multiple industries. This highlights the growing influence of AI and the need for companies to find innovative solutions to secure critical components.