For about 50 years, consumers across the world could count on digital devices getting less expensive even as they became more powerful. Those days are over. The price of memory – not the fancy, most powerful semiconductor ships but the basic ones needed for dynamic random access memory (DRAM) in ordinary digital devices, has climbed roughly 700% since 2022.
Apple announced major price increases for its consumer products last week, but the same story affects Android phones, gaming devices, laptops, and a host of other consumer digital products. A story by Alina Maria Stan in The Next Web shows how the rising price of memory is stifling the global growth of the digital economy; it is “killing the cheap smartphone,” forcing budget smartphone makers like Transsion, Oppo, Vivo, and Lava to reduce their profits by 50% and reduce their shipments by 15% – 40%.
According to Stan,
In India, the sub-$100 smartphone market collapsed 59% year on year in Q1 2026. In Africa, where 81% of smartphone shipments were in the sub-$200 category in 2025, many consumers will simply be priced out of phone ownership entirely. The technology that connected hundreds of millions of the world’s poorest people to the internet is becoming unaffordable.
The standard story is that AI is responsible for this change. That’s partly true, but it is only half of the story. The real culprit is the United States’ attempt to securitize and de-globalize chip production by imposing export controls and import controls on China. This has eliminated a key source of additional capacity that could have ameliorated the sudden shortage of DRAM.
The Big Shift
Training and running AI models requires high-bandwidth memory (HBM). HBM profit margins are 70% or higher, whereas commodity DRAM margins are around 20% – 30%. In 2023, HBM accounted for 2% of memory makers’ wafers. By the end of 2026, it is expected to reach 20%. Instead of expanding their production capacity to meet the AI-driven demand for HBM, chip producers reallocated existing capacity. Every wafer pushed into HBM production removes capacity from the memory that goes into phones and laptops.
The DRAM market is highly concentrated. The “Big Three” suppliers, Samsung Electronics, SK Hynix, and Micron Technology, control roughly 90% of global DRAM revenue.
In this massive reallocation of DRAM production away from consumer electronics and toward AI data centres, Micron went the furthest. Late last year (December 2025), it completely discontinued its consumer-oriented Crucial brand, redirecting all its capacity to HBM and enterprise. One of three global DRAM producers simply left the consumer market.
The Antitrust Lawsuit
An oligopolistic market structure makes collusion easier. This helps to explain why a group of seventeen small electronics repair shops and consumer plaintiffs have filed a class action antitrust lawsuit against the big three. The plaintiffs allege that the defendants conspired to artificially restrict the global supply of conventional DRAM memory.
In a frictionless, globalized economy, however, a supply shortage in one region is naturally corrected by excess capacity in another. Right now, ChangXin Memory Technologies (CXMT) is aggressively churning out commodity DDR4 and DDR5 memory. In fact, reports from the broader market show CXMT components entering certain channels at prices drastically lower than the $300 to $400 global average in the Western market.
The point about CXMT is that the Big Three didn’t need cartel collusion to bring about this situation. The reason cheaper supply isn’t driving down costs for companies like Apple or Microsoft isn’t a lack of chips—it is because U.S. policy effectively bans the supply adjustment. By preventing Western buyers from accessing the world’s fastest-growing commodity memory producer, U.S. national security policies are directly protecting the pricing power of the established oligopoly, leaving Western consumers to foot the bill.
How US Policy Reinforces Supply Shortages
In January 2025, the U.S. Department of Defense designated CXMT as a “Chinese Military Company” under Section 1260H of the National Defense Authorization Act. This designation legally bars the U.S. military and federal agencies from purchasing any systems or hardware containing CXMT chips. While it does not criminalize private U.S. companies from buying them, it carries immense reputational risk. Major U.S. computer and device manufacturers (OEMs) generally avoid sourcing 1260H-listed components to protect their eligibility for federal contracts.
Even though buying CXMT chips is not illegal, major U.S. corporations are effectively blocked from this supplier by the threat of retroactive blacklisting through the more restrictive Entity List. If U.S. firms like Apple design their products around CXMT memory, a sudden shift in U.S. policy could move CXMT to the Entity List overnight. This would instantly freeze the supply chain and leave the U.S. buyer without components. There is also reputational and political risk of being publicly linked to a supplier labeled a “Chinese military company” by the Pentagon.
By keeping CXMT on the 1260H military blacklist and keeping the threat of the Commerce Department’s restrictive Entity List hanging over them, Washington has turned Western hardware manufacturers into a captive audience for Samsung, SK Hynix, and Micron. If Apple were free to sign a massive, multi-billion-dollar supply agreement with CXMT without facing catastrophic regulatory or reputational risk, the Western commodity DRAM shortage would collapse almost overnight.
The Price of Securitization
To see only collusion among the Big Three suppliers is to miss the real story. The operation of Moore’s law always relied on market competition. Moore’s law is being repealed by the China hawks. The underlying problem here is the attempt by the U.S. government to de-globalize the semiconductor supply chain, as part of its deeply confused mix of national security policy, trade policy and industrial policy. Add to this the exploitation of national security fears by domestic firms seeking protection from competition, and you are bound to get higher prices and shortages. Micron spent years lobbying Washington to blacklist earlier Chinese memory startups, such as Fujian Jinhua and YMTC. Now it is actively and aggressively lobbying the U.S. government to maintain and tighten barriers against CXMT and other emerging Chinese memory competitors, even as it shuts down its own DRAM capacity. Micron has also been identified as a key proponent and driving force behind the MATCH Act, legislation that significantly tightens U.S. export controls on the manufacturing tools made by American firms that will be purchased by Chinese memory manufacturers like CXMT and YMTC. By lobbying for this bill, Micron seeks to legally restrict CXMT’s ability to acquire the equipment necessary to scale up its capacity or advance to more sophisticated manufacturing nodes.
Semiconductors are indeed the key to the digital economy, but subordinating complex, globalized supply chain markets to geopolitical power games is a major disruption. The unintended consequences are just starting to play out.
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