Memory Chip Shortage: SK Hynix Booms as PCs and Consoles Pay

The same chip, two very different stories

The AI infrastructure boom has split the memory market into winners and losers. SK Hynix sits firmly among the winners. Gamers and PC buyers are on the other side.

The Korean chipmaker reported second-quarter 2026 revenue of KRW 79.3 trillion, up 256.8% from KRW 22.2 trillion a year earlier 4. Operating profit grew even faster, rising 557.2% to roughly KRW 60.5 trillion 4. That works out to an operating margin of about three-quarters of revenue, which is extraordinary for a company in what has long been one of the most cyclical corners of semiconductors. The stock closed at KRW 1,841,000 on October 2 4. The growth is tied to demand for high-bandwidth memory (HBM) and broader AI infrastructure spending, and analysts expect HBM4 adoption and more memory per accelerator to keep demand strong into 2027 4.

What makes this cycle different is that the windfall is no longer staying inside the data center. Capacity that hyperscalers buy for AI is capacity that consumer electronics makers no longer get.

Prices keep climbing, though more slowly

Bernstein estimates that memory chip contract prices rose almost 20% in the third quarter compared with the second, with both conventional DRAM and NAND moving higher 3. The firm expects shortages to last into 2027 and names AI demand outrunning production as the main cause 3.

One detail cuts against the most alarming readings. Bernstein says the Q3 increase was smaller than the one in Q2, although it remained above historical norms 3. That suggests prices are still rising but the rate of increase may be easing. It does not mean prices are falling.

Other data shows how long the run has lasted. TrendForce figures, as reported by the Chosun Ilbo, show DRAM contract prices up for 18 consecutive months and NAND flash for 21 1.

PCs take the hardest hit

The clearest damage shows up in PC shipments. IDC's preliminary data has global third-quarter shipments down 20.1% year over year, to 62.7 million units from 78.5 million 2. Omdia's count is worse: a 21.2% decline to 58.1 million units 2. The two trackers disagree on the exact numbers, but they agree on the size of the slump and its cause, which is memory pricing 2.

Omdia puts the cost problem in concrete terms. DRAM and SSDs went from roughly 15% of a PC's component cost to nearly 40%, after prices rose more than fourfold 2. Tom's Hardware has reported memory price increases of as much as 500% in parts of the market 2. When memory and storage cost more than the processor, PC makers face hard choices on pricing and specs, and buyers appear to be putting off upgrades.

Consoles feel it at the register

Consoles show the same pressure in a way shoppers can see directly. GameStop raised the price of a refurbished PS5 Pro to $1,399.99, which is 55% above the console's $899.99 new price 1. Microsoft and Nintendo have each raised console prices twice in the past 14 months, also citing memory costs 1.

A used unit selling well above the new list price usually means new stock is scarce. Retailers are charging what a tight market will bear rather than following what the manufacturer says the product should cost. Consoles rely on commodity DRAM and NAND, the same parts the AI build-out is absorbing, and console makers cannot outbid hyperscalers for that supply 1.

Reading the cycle

Taken together, these reports describe a transfer of value. Memory makers like SK Hynix are capturing record margins. PC and console makers, along with their customers, are absorbing the cost. The AI-driven surge in memory demand is now raising costs across consumer electronics.

Investors should weigh two points. First, the bullish case rests on AI demand staying strong through 2027, a view that both the Korean analyst commentary and Bernstein share 34. Second, the slowing pace of price increases that Bernstein flagged is worth tracking 3. In past memory cycles, a slowdown in price growth has often come before the turn. At the same time, a 20% collapse in PC shipments is the kind of demand destruction that eventually feeds back into the market.

My reading is that the squeeze probably has further to run. Supply is tight, AI buyers are paying almost any price, and new capacity takes years to bring online. The cost of this boom, however, is increasingly falling on ordinary consumers. If PC and console demand keeps weakening, memory makers will become more dependent on a single AI-driven buyer base, a concentration risk the current profit figures do not show.