Nvidia's Major Shift, AI Chip Shortages, and the Risk of Rising Gadget Prices

Rising Smartphone Costs: Analysts warn that the cost of smartphones may increase due to supply chain bottlenecks caused by the AI boom, with critical components like memory chips and storage devices experiencing significant price spikes.

Supply Chain Bottlenecks: The demand for AI data center chips is creating shortages in semiconductor manufacturing, particularly affecting dynamic random-access memory (DRAM) and hard disk drives (HDDs), which are essential for both data centers and consumer electronics.

Nvidia's Impact on Supply: Nvidia's shift to using Low-Power Double Data Rate (LPDDR) memory, which is also in high demand from consumer electronics manufacturers, is exacerbating supply constraints and could lead to further shortages in the market.

Broader Industry Effects: The semiconductor supply chain issues are not only impacting consumer electronics but also other sectors like automotive and aerospace, as many industries rely on the same manufacturing capabilities, leading to potential price increases and production constraints across the board.