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Sony, Nintendo grapple with memory price surge as AI boom constrains supply - Reuters

Published
Score
11

Why it matters

Sony and Nintendo have announced significant price increases for the PlayStation 5 and Switch 2, respectively, citing surging memory chip costs driven by AI data center demand. Memory chip prices doubled in the first quarter of 2026 and are forecast to rise another 63% in the second quarter. Nintendo reported an expected 100 billion yen ($638 million) cost increase for the current financial year, while Sony raised PS5 prices globally by $100 in the U.S. market. The pricing decisions were announced by Nintendo President Shuntaro Furukawa and Sony CEO Hiroki Totoki. U.S. tariffs under the Trump administration also contributed to Nintendo's cost pressures.

AI infrastructure expansion has created unprecedented demand for memory semiconductors, straining supply across smartphones, laptops, and automobiles. Chip manufacturers Samsung, SK Hynix, and Micron are investing billions in new production capacity, but new fabrication lines require at least one year to operationalize. Sony stated it has secured supply through this financial year but expects continued high prices into 2027. Iran war uncertainties present additional supply chain risks.

The price increases signal broader supply chain constraints extending well beyond the gaming sector. Attorneys tracking semiconductor supply issues, tariff exposure, or consumer product liability should monitor whether these price increases trigger regulatory scrutiny or class action exposure. The extended timeline for new chip production capacity suggests these cost pressures will persist through 2027, potentially affecting other consumer electronics manufacturers facing similar supply constraints.

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