Chip shortage fears drag tech shares as memory costs climb
Tech stocks sold off after higher memory and storage costs fed worries that AI demand is straining chip supply and pushing up device prices.
By Daniel Okafor · Business Editor
3 min read
U.S. stock futures fell after a broad tech selloff in Asia and Europe, as investors reacted to signs that rising memory and storage chip costs are spreading into consumer devices, according to Fortune. Deutsche Bank analysts described the squeeze as a “memory supply crisis,” linking it to heavy demand from AI infrastructure.
The pressure could reach beyond chipmakers because memory and storage components sit inside computers, tablets, game consoles and data centers. Fortune reported that traders sold tech shares after Apple said it would raise device prices to cover higher memory and storage costs.
Tech shares take the hit
S&P 500 futures were down 0.54% in morning trading after the index finished flat the previous session, according to Fortune. In Europe, the Stoxx 600 fell 0.83% in early trading, while the FTSE 100 was down 0.75% before midday in the U.K.
The selling was sharper in parts of Asia. Fortune reported South Korea’s KOSPI dropped 5.81%, Japan’s Nikkei 225 lost 4.15% and China’s CSI 300 fell 3.03%, while India’s Nifty 50 rose 0.14%.
Deutsche Bank’s Jim Reid told clients that SoftBank was down about 14% after The New York Times suggested OpenAI may delay its IPO until 2027. Reid also said the Magnificent 7 fell 2.54% the previous day and moved further into correction territory, with investors reacting to surging demand for memory and storage and to fears that AI data centers are adding inflation pressure.
Other market indicators also moved. Fortune reported Brent crude traded at $72 a barrel, down from a high of $75 the previous day, while bitcoin stood at $60,000.
AI demand strains supply
Deutsche Bank’s Marion Laboure and colleagues said AI-related demand is absorbing chip supply that would otherwise serve everyday consumer products. The analysts said Qualcomm and AMD have both pointed to memory limits affecting demand for consumer devices.
The bank also tied the pressure to U.S. producer-price data. According to Deutsche Bank, prices for electronic components and accessories, a category that includes semiconductor and memory-device prices, rose 26.9% year over year in May, compared with a 5.9% annual rise in January.
Recent price increases by large technology companies added to the concern. The Wall Street Journal reported that Apple raised prices on some Mac and iPad models by $200 or more, while Bloomberg reported Microsoft lifted Xbox prices for the third time in 13 months.
Fortune said Micron’s strong earnings can move the wider market because the company serves as a gauge for memory-chip conditions. Heavy investment in AI has lifted demand across chip categories, benefiting suppliers while raising costs for companies that need those parts.
Vanguard analysts Jumana Saleheen and Thiago Ferreira said AI investment remains in the early phase of a major economic shift and compared the spending cycle with the 19th-century railroad buildout and the late-1990s technology boom. Vanguard forecast U.S. GDP growth of 3% in 2027, with AI infrastructure spending providing a large share of the lift.
This story draws on original reporting from Fortune.