Many businesses will close this year. The reason is simple

The growing demand for AI infrastructure is starting to have a greater impact on the consumer electronics market. According to the president of Phison Electronics, Chien Cheng Pan, the effects could be dramatic for many companies. In a recent interview, he stated that by the end of 2026, some consumer equipment manufacturers may go bankrupt or completely withdraw from selected product lines. The reason is said to be a memory shortage fueled by the artificial intelligence boom.

You argue that DRAM and NAND shortages may persist even until 2030. Moreover, dice suppliers will now require up to three years of prepayments. The market has clearly tilted towards sellers (i.e. mainly Samsung, SK hynix and Micron), who can dictate terms and choose the most profitable customers.

Phison’s boss predicts a real shake-up among manufacturers, with a wave of closures and product withdrawals already at the end of this year and in the years to come. In his opinion, global production of smartphones may decline by 200 to 250 million units, and significant cuts will also affect the PC and TV markets.

The scale of price pressure is enormous. For example, 8 GB of eMMC memory cost about $1.50 at the beginning of 2025, today it is almost $20, and more durable versions (including those for the automotive industry) are close to $30. Despite this, availability remains unstable.

During shortages, suppliers naturally divert supply to higher-margin customers. In your opinion, it is the manufacturers of consumer devices that suffer first. In a smartphone, the cost of memory can be over 20% of the total material cost, while in servers it is usually 5-6%. Data centers are therefore able to pay more and guarantee their production allocations.

One of the side effects of the current situation may be the extension of the life cycle of devices. If the prices of new models increase, consumers will be more likely to decide to repair rather than replace the equipment with a new one.