As competition to build AI data centers continues to keep memory chip supply from keeping up with demand, there are signs inflation for consumer devices such as PCs and smartphones will be prolonged.

Major memory chip makers have already shifted toward expanding chip production for AI customers. They have judged that selling high-priced chips for AI data centers is more profitable than selling chips for PCs or smartphones.

That has cut shipments of memory chips for consumer devices, and memory prices used in consumer devices keep rising. As memory chip prices jump, final product prices have no choice but to rise as well.

According to a recent New York Times report, Falcon Northwest, a company that sells custom-built PCs to users such as gamers who need high performance, raised the price of some popular high-performance computers from $5,800 to more than $7,000 as memory chip prices tripled since last summer.

Market research firm TechInsights expects average PC prices will rise 23% year on year by this autumn, or about $118, due to higher memory chip prices. That includes price increases in NAND flash memory, used as storage in PCs and smartphones, in addition to RAM prices. Microsoft CFO Amy Hood recently forecast PC segment revenue will fall, and cited the impact of rising memory prices as one of the reasons, the New York Times reported.

Big PC makers such as Dell and Apple can manage sudden price spikes to some extent because they sign long-term supply contracts with memory makers, but that appears to be difficult these days. According to market analysis firm Circana, the average retail price of base-spec laptop PCs jumped 7% in two weeks as of Jan. 3.

Memory chips are seen as a field of intense price competition because products from related companies are mutually compatible. From time to time, memory chip makers also suffer large losses when prices plunge due to overproduction.

In this process, several companies failed to hold out and dropped out of the market, and it has now been reshaped into a three-way competition among Samsung Electronics, SK Hynix and Micron Technology. As the AI boom drives up memory chip prices, these companies are enjoying sharp gains in revenue and share prices.

Moves by the industry to focus on AI appear to be gaining momentum. Micron has sold various memory products to consumers and small and midsize businesses, but said last month it will stop Crucial, its direct-to-consumer sales business. It was to focus more on strategic customers in the AI sector. Micron is also investing aggressively in factories that turn silicon wafers into chips.

A surge in demand for memory chips is also having a positive impact on growth across the broader semiconductor industry. IDC expects total semiconductor industry revenue will rise 28% this year to more than $1 trillion. The New York Times reported that surpassing $1 trillion is a milestone many experts expected would not be possible until after 2023.