NOR Flash and NAND manufacturers are shifting focus to AI chips, making home appliances more expensive

Due to the AI boom, prices for the cheapest NOR Flash and SLC NAND are skyrocketing. That means most semiconductor manufacturers are shifting to AI servers because they're more profitable, so everyday devices like home appliances, routers, and smartwatches may lack basic memory.

The reasoning behind the increased shortage of NOR Flash and SLC NAND

The explanation is fairly simple: chip manufacturers are limited in the number of production lines. Most companies are deliberately cutting the production of cheaper chips, and that is increasing the shortage.

A huge negative impact will be immediately noticed by the electronics manufacturers with low profit margins. The entire market of consumer electronics and networking equipment has previously functioned on slim profit margins, and even a minimal increase in component price can tremendously impact retail price.

Initially, the price increases affected NAND and DRAM modules for SSDs, whereas now it is reaching the simplest chips for the low-end price segment.

Of course, the price increase may be only a few percent, but when multiplied by millions of smartwatches, routers, and small home appliances, it can lead to a significant increase in the price for finished products.

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