The Death of the Cheap Laptop is Coming

Every electronic device you use depends on components manufactured by several of the same companies. Almost all PC and smart-device memory (or DRAM) is made by Samsung and SK Hynix, both based in South Korea, and Micron, based in the US. The same companies, along with a few others, are responsible for almost all production of NAND (a type of non-volatile storage technology), and NAND chips are used in solid state drives (SSDs), smart device internal storage, and flash memory.

Similarly, almost all modern processors are created by a handful of semiconductor foundries owned by a small number of large companies. The largest of these is the Taiwan Semiconductor Manufacturing Company, or TSMC, followed by Samsung, which has smaller entities that provide the manufacturing component.

These basic components go into the devices you use every day, including your phone and laptop, but they’re also the same things that go into building AI servers and development hardware. Companies like Samsung and SK Hynix have limits on the number of components they can make, due to the relatively small number of manufacturing facilities, the limited amount of raw materials, and the time required to build NAND and semiconductors. And increasing that output takes a large amount of money and, most importantly, time.

This interconnected web of production and business relationships was raised last fall. OpenAI started a procurement war with the announcement that it acquired a significant percentage of the DRAM output of Samsung and SK Hynix (these two companies were responsible for about 67% of the global market combined last year) for an unknown period. Analysts estimate that the plan, which allows for up to 900,000 DRAM wafers per month, could cover 40% of the world’s RAM supply at the time of the deal.

That agreement started a partial rush, as other AI companies and infrastructure providers moved to end the same long-term warranties for DRAM and then additional components, including NAND products (found in SSDs and flash memory for PCs, smart devices, electronics, and cars) and hard disk drives (servers).

Manufacturers, such as TSMC, responsible for making processors and simple integrated circuits (used in CPUs, GPUs, control chips, chips for smart devices, and the like) are also seeing a growing demand. Companies like OpenAI, Anthropic, and Google, often referred to as hyperscalers, have almost shut down industrial production, and smaller players are now adopting off-the-shelf consumer-grade hardware for AI development tools, driving up the prices of existing products.

The result is a price explosion affecting PC components, such as memory and storage, and a knock-on effect on devices such as laptops, where prices have already increased by 20% year-on-year for similar models. Companies expect that trend to worsen. And companies that thought they’d made at least two quarters before the RAM price crisis last fall are now facing unexpected storage price increases.

Component manufacturers are ending long-term price agreements and only agreeing to short-term commitments, which means regular price increases are on the horizon for device makers. Some manufacturers are already warning that they will not be able to meet the needs of their “core customers.” In fact, some parts manufacturers have already informed their customers that all of their 2026 inventory is already gone.