US memory chipmaker Micron will report results on Wednesday, and the market expects another record quarter. But the AI boom also has a downside that consumers will soon feel: more expensive phones, laptops and gaming consoles. This Christmas is very likely to cost more.
Together with Korea’s Samsung and SK Hynix, Micron Technology forms an oligopoly in advanced memory chip production. It will report earnings on Wednesday, September 30, after the US market close. The company is seeing record demand and guides for revenue of around $50 billion at a gross margin of roughly 86%. Wall Street expectations are slightly higher still. That is one reason Micron is among the fastest-growing stocks on the US market, up 277% year to date.
Growth is driven by HBM, the high-bandwidth memory chips that are an essential part of AI processors such as Nvidia’s. Production capacity for them is completely sold out. The memory shortage could last at least until 2028, because building new manufacturing capacity takes years and companies in the industry are cautious about expanding.
Crucially, every piece of silicon that goes into HBM for AI is missing from a phone’s RAM or a laptop’s storage. Memory makers continue to prioritize AI customers, so the shortage of memory for consumer electronics is starting to show up in prices.
The new iPhone is a good example. According to TrendForce, the memory in the new 256 GB iPhone 18 Pro costs about 400% more than a year ago, and the phone’s total component cost has risen by about 38%. Apple has therefore raised the price of both new Pro models by roughly CZK 2,000. Cheaper models and Android phones will have to raise prices even more sharply. Older phones will also get more expensive, since they use the same memory as the new ones and manufacturers hold only small inventories.
The same story is playing out with gaming consoles. In the spring, Sony raised the price of the PlayStation 5 with a disc drive by roughly CZK 2,500. Since August, Microsoft has raised the price of the 1 TB Xbox Series X by roughly CZK 4,000. Since September, Nintendo has raised the price of the Switch 2 by almost CZK 750. PC makers Lenovo, Dell, HP, Acer and Asus are raising prices by 15 to 20%, and the average smartphone price is expected to rise by 14% this year. So anyone planning to buy a new laptop, phone or console before Christmas will probably pay more.
For investors, however, the Micron story isn’t entirely clear-cut. The market already expects a strong quarter, so what the company says about its outlook for the coming months will matter more. Memory is one of the most cyclical industries in the world, and a turnaround can come very quickly. Record prices and margins encourage capacity expansion, which could paradoxically cool this gold rush, and a slowdown in AI investment would also be a risk. We see that as unlikely, however.
Micron hedges against this with multi-year customer contracts that, according to management, should ensure more stable results. Investors will also watch for potential share buybacks, following the example of Nvidia, which announced the largest buyback in history. If Micron confirms on Wednesday that the memory shortage will persist into next year, shareholders will have reason to celebrate. Conversely, if you’re planning to buy electronics, it could signal further price increases. If the current shortage continues into next year, we can expect phones, laptops, tablets and consoles to rise by another few thousand crowns. The amount will depend on memory capacity, with higher-capacity devices seeing the biggest increases.
