On November 19, market research firm Counterpoint Research released a report stating that NVIDIA has opted to switch to low-power LPDDR memory chips, which are commonly used in smartphones, to replace the traditional DDR5 memory chips in servers. This strategic move aims to cut down on power consumption in AI servers.

Considering that the quantity of memory chips needed for each AI server vastly outnumbers that required for smartphones, this decision is anticipated to spark a sudden and significant uptick in industry demand. Consequently, server memory prices are projected to soar, potentially doubling by the end of 2026.

It's worth noting that prior to this development, the global electronics supply chain was already grappling with pressures stemming from a scarcity of traditional memory chips. NVIDIA's transition to LPDDR memory chips could intensify the supply crunch in the low-end market segment. Moreover, it might compel chip manufacturers to re-evaluate and adjust their capacity allocations, which would, in turn, fuel further increases in memory prices.