Laptops, smartphones and even cars are getting more expensive. Here’s why

As the world of tech has grown, prices have generally decreased as technology is made more accessible for mass consumption. Now, old tech is getting more expensive, with new devices set to have price tags far beyond what we are accustomed to seeing. Budgeting for a new phone or a fancy console is less manageable, and the forecast shows it is only going to get worse.

Related video above: Cleaning can keep electronics working better, longer

This is because of a microchip shortage that is sending shock waves around the world.

Key points

• A microchip shortage driven by AI companies and data centers is causing prices to rise.
• Consumer electronics, including Apple products and gaming consoles, have increased in price despite little to no change to the devices.
• The shortage is expected to impact price and availability across a variety of goods and services, such as cars, medical devices, kitchen appliances, TVs, internet connection and more.

Microchips are sets of electronic circuits on small pieces of silicon that are used everywhere, including in smartphones, cars and medical devices, per ASML. The microchips at the center of this shortage are memory chips, semiconductor components that store information in electronic devices so they can perform tasks quickly.

The shortage is driven largely by artificial intelligence companies buying up large stocks of the available microchips to power their AI networks and run their data centers. As a result, these companies have severely reduced the supply of memory chips worldwide, driving up the costs for these components — costs that are eventually passed down to the consumer.

The market is further impacted by microchip manufacturers, who are incentivized to prioritize big tech and AI companies’ orders due to their ability to buy memory chips at scale and pay a premium for longer contracts, said James Bull, RSM UK’s tech senior analyst, according to the BBC.

Price hikes and reduced manufacturing are already being felt as a result of AI’s pressure on the microchip market. Old and new products are being stamped with higher price tags and warnings of low availability — the effects of a shortage forecast to last until the end of 2027 or potentially longer.

What price hikes are we seeing now and in the future?

Currently, we are seeing price increases across consumer electronics, including smartphones, computers and gaming devices.

On June 25, Apple announced multiple changes, increasing the prices of several MacBooks and iPads by $100 to $300.

“The consumer electronics industry is facing an unprecedented challenge,” Apple said in a statement. “The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage. We have never seen a component price increase this much, this quickly.”

IPhones are also expected to feel the impact of the shortage. Tarun Pathak, research director at Counterpoint Research, predicts the smartphone might see an increase of around $200, according to CNBC.

PC vendors are warning of tougher times ahead, with Lenovo, Dell, HP, Acer and ASUS confirming 15% to 20% hikes in response to the memory shortage, per IDC.

“With both demand clarity and supply constraints converging, suppliers have steadily pushed prices upward, in some cases aggressively,” Mike Howard from Tech Insights told the BBC. “In PCs, memory typically accounts for 15 to 20 percent of total cost, but current pricing has pushed that toward 30 to 40 percent.”

The effects of the memory chip shortage are seen most clearly in the gaming industry. Several consoles have risen in cost, including Sony’s PlayStation 5 models by $100 to $150 — which went into effect earlier this year — and Microsoft’s Xbox consoles by $100 to $150, which will go into effect Aug. 1 and follow a separate price increase in October. Japan’s Nintendo has also felt the impact, increasing the price of its Switch 2 in the U.S. by $50.

“We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options,” Microsoft wrote in a news release. “Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027.”

Valve has issued the largest price hikes for its 2023 handheld gaming PC, the Steam Deck OLED. Originally released at $549 for the 512-gigabyte model and $649 for the 1-terabyte model, they are now priced at $789 and $949, respectively, even though the device itself has not changed.

The company’s new product, the Steam Machine, released June 22, 2026, was set at the shocking price points of $1,049 for the 512-gigabyte model and $1,349 for the 2-terabyte model. Valve wrote in a news release announcing the product’s launch that “the prices we’re sharing today reflect the state of the world for manufacturing; or, more accurately, it reflects the price of the components as we’ve secured them over the past 6 months.”

“Price wasn’t the only thing impacted by all of this: availability was as well,” the company added. “There were periods where we found we couldn’t source some of our components at all, at any price. More than anything else, this has impacted the number of units we’ve been able to produce for launch.”

While the impact of the microchip shortage may seem avoidable by holding onto older devices and avoiding costly repairs, the effects are expected to spread far beyond just consumer electronics.

Memory chips are used almost everywhere, and the component shortage could send ripples across a variety of industries, affecting the price and availability of cars, medical devices, kitchen appliances, TVs, internet connection and more.

Sean Hollister, senior editor at The Verge, said in an interview with NPR, “I expect to see it in some way in just about everything. If you have a smart fridge, that has memory in it. If you visit a hospital that needs new equipment, that new equipment is going to have memory in it. Some farm tractors have equipment in it. If you have a cable modem that brings your internet connection into your house … the price of that memory has gone up by about seven times.”

As concerns about the shortage’s sweeping consequences continue to grow, multiple associations signed a letter sent to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick on June 3, requesting their attention to the imbalance and detailing current real-world impacts that include “significantly higher costs for building, maintaining, and upgrading our nation’s Internet and telecommunications infrastructure; risks to the production and availability of automobiles, medical devices, and other manufactured goods; and delay and disruption in the ability of federal contractors—especially small businesses—to deliver on procurement obligations.”

Subscription service prices also on the rise

New tech is not the only thing getting caught in the wave of rising prices. The inclusion of AI into some existing software programs is raising prices for consumers, despite their usage of or desire for the component.

In 2025, Microsoft increased the price of its Microsoft 365 Personal and Family subscriptions when it added its AI assistant to the plan, raising it from $69.99 to $99.99 a year.

Google made a similar move when it incorporated its Google AI into its Workspace Business and Enterprise plans, increasing the price by $2 a month.

Adobe and Intuit also implemented price hikes for their programs. Adobe renamed its Creative Cloud All Apps plan to Creative Cloud Pro when it added artificial intelligence features and raised the price from $59.99 to $69.99 last year. It also created a Creative Cloud Standard plan, with limited access to its generative AI but also fewer features, for $54.99 a month. Intuit increased the price of QuickBooks Online when it updated to include AI services, bringing the cost of monthly subscriptions for QuickBooks Online Essentials, Plus and Advanced from $75, $115 and $275 to $85, $140 and $340, respectively.

What next?

Without taking steps to mitigate the memory shortage, we can expect to see more price increases on old and new products, shrinking supply, and widespread effects across a variety of industries.

Some companies have already sought methods to alleviate the crisis, with Apple looking to get approval from the White House to purchase microchips from the blacklisted company CXMT, which has been designated as a Chinese military company, the Financial Times and Tom’s Hardware report.

Taiwan Semiconductor Manufacturing Co., a Taiwanese computer chipmaker and key supplier to Nvidia and Apple, announced Thursday that it would spend another $100 billion on expanding its manufacturing capacity in the U.S. after previously pledging to invest $165 billion, according to The Associated Press.

TSMC Chairman and CEO C.C. Wei said the expansion of its operations in the U.S., as well as in Taiwan and Japan, aims to address the rise in microchip demand, per The New York Times.

“This is to support the strong multi-year demand from our leading U.S. customers,” said Wei, “and we believe this investment will further foster the development of the U.S. semiconductor ecosystem (and) strengthen the supply chain.”

Meanwhile, on June 25, 2026, 14 individuals and three businesses filed a lawsuit that says chip manufacturers Samsung, SK Hynix and Micron are utilizing market conditions to drive up prices.

The suit alleges the companies have “fixed supply and prices for DRAM (a type of memory chip), engaging in conduct that makes no economic sense absent collusion and that has driven up the price of conventional DRAM (sometimes called commodity DRAM) approximately 700% in a four-year period,” according to Polygon.

The filing says the three firms have raised the price of DRAM by decreasing production amid surging demand and redirecting their focus to High Bandwidth Memory, a type of computer memory that is generally used in data centers, Polygon reports.

At least in the near future, even with remedial changes, prices are not expected to go down anytime soon and may increase further. Consumers may want to see what deals they can get now before more hikes hit the market, or hold onto their older devices until an end to the shortage is in sight.

The Associated Press contributed to this report.