On November 19 (Wednesday), Counterpoint Research released a report indicating that NVIDIA, in a bid to curb power consumption in its AI servers, has opted to transition from the prevalent DDR5 server memory chips to LPDDR variants. LPDDR, renowned for its low power consumption, is a staple in mobile devices like smartphones and tablets. This strategic pivot by NVIDIA could potentially cause server memory prices to soar, potentially doubling them by the end of 2026.

Over the past two months, the global electronics supply chain has grappled with a scarcity of traditional memory chips, as manufacturers have redirected their focus towards producing high-end semiconductor memory chips tailored for AI applications. Counterpoint Research highlighted that AI servers demand a significantly higher volume of memory chips compared to mobile phones. NVIDIA's decision is poised to create an unforeseen surge in demand, which could exacerbate the existing shortage and extend it from the low-end to the high-end market segments. Presently, chip manufacturers are deliberating whether to reallocate more of their production capacity towards LPDDR to cater to NVIDIA's burgeoning requirements.