Memory shortage and tariff risks collide in AI chip supply

AI growth is exposing new cracks in the global chip supply chain.

It's quickly become a tale as old as time. Artificial intelligence is draining supplies faster than manufacturers can make them and is showing no signs of slowing down. With data center demand consuming an outsized share of memory output, enterprise and consumer markets are exposed to the evolving memory shortage and insane price fluctuations.  

Meanwhile, renewed tariff threats from the U.S. targeting South Korean chipmakers risk compounding these constraints. If such a measure passes, there might be nowhere else for geo-specific procurement teams to source critical components. With over 70% of the memory market share held by Samsung and SK Hynix, U.S.-based OEMs and EMS firms will have no stable alternative.  

AI data centers intensify the global memory shortage

AI’s appetite for memory hardware has triggered a massive shortage in product across industries, and experts warn the crunch isn’t likely to end anytime soon. Both DRAM and NAND are being consumed at an unprecedented rate by AI data centers, leaving traditional tech segments struggling to secure allocation.  

In an interview with CNBC, Synopsys CEO Sassine Ghazi emphasized that memory has become the most significant bottleneck in next-gen AI deployment.

“[Most memory] is going directly to AI infrastructure, but many other products need memory, so those other markets are starved today because there is no capacity left for them,” he warned, noting that the crunch is poised to continue through 2026 and even into 2027.  

OEMs and enterprise hardware vendors are already feeling the squeeze. Lenovo’s chief financial officer, Winston Cheng, echoed the sentiment in a recent interview, predicting more price increases in the days ahead.  

Commercial and consumer product lines being deprioritized in as memory suppliers funnel limited inventory toward high-margin AI customers. This has left DRAM buyers in the PC, smartphone, and traditional enterprise markets facing increased lead times, unpredictable pricing, and in some cases, complete inability to obtain supply.  

The world’s largest memory makers, including Samsung, SK Hynix, and Micron are prioritizing supply for hyperscale and AI clients, recognizing that data center buyers are not only absorbing capacity faster but are willing to pay a premium for performance and consistency. This trend is rapidly cementing a two-tier supply market with one reality for AI-focused buyers and another for everyone else.  

For now, answers to the shortage are few and far between. Ghazi and other industry leaders anticipate tight supply conditions for the foreseeable future with elevated pricing becoming the new baseline.  

Sourcing and procurement teams must take note. This crunch isn’t temporary or a market distortion like those seen in the past. As AI continues to proliferate, expect a long-term realignment of the memory sector to meet demand.  

Sourceability helps customers navigate memory shortages by identifying and securing approved alternate components from our network of franchise partners and excess markets. Our team of global experts can help you explore your options and create a risk management strategy before market shortages severely impact your production lines.  

Tariff threats add new risk to chip sourcing strategies

Even as AI demand exposes structural weakness in memory supply, the global chip supply chain is facing disruption on another front: geopolitical negotiations. In a move that would send shockwaves through sourcing strategies, U.S. Commerce Secretary Howard Lutnick has warned that South Korean chipmakers may soon face tariffs of up to 100% unless they significantly expand production on American soil.  

This policy threat comes at a precarious moment. Samsung and SK Hynix together control more than 70% of the global memory supply, yet neither company’s U.S. investments currently include memory manufacturing. As a result, even though both firms have committed to building fabs on American soil, their shipments of DRAM and NAND from Asia could still be subject to tariffs.

Under the proposed framework, Micron—the only major memory supplier headquartered in the U.S.—is the likely beneficiary. The firm saw its stock price soar 51.1% in January thanks to the news, but it cannot meaningfully replace the global capacity of its South Korean competitors.  

In a press conference earlier this month, Lutnick told reporters, “Everyone who wants to build memory has two choices: They can pay a 100% tariff, or they can build in America.”  

Taiwan faced a similar threat but unveiled a new trade deal early this year that eases tariffs in return for increased investment in U.S. operations. The framework allows Taiwanese firms to import 2.5 times their current capacity tariff-free while completing construction in the U.S.  

Tech companies in Taiwan have committed to at least $250 billion in new direct investments in American manufacturing, with TSMC accounting for the largest chunk to build several new fabs. Whether South Korea can (or is willing to) strike a similar bargain will be an important event to monitor in the coming weeks.  

For buyers already navigating elevated prices, this new tariff risk could further destabilize fragile procurement strategies. A 100% duty would yield further price hikes and make procuring critical parts even more challenging. Given the concentrated nature of memory production, there are few viable alternatives if South Korean supply is throttled.  

As the U.S. continues using tariffs to punish adversaries and pressure allies into reshoring capacity, short-term uncertainty will be a defining feature of the market in 2026.  

Sourceability can help customers mitigate tariff exposure by qualifying multi-region supply options that balance costs with component quality. Whether you’re navigating export restrictions or need to hedge against sudden policy shifts, our experts can help you develop a more resilient procurement strategy.