Memory Crisis Could Last a Decade and Bankrupt Electronics Companies, Warns Industry CEO
Published February 18, 2026 2:11pm | Updated February 18, 2026 2:11pm
Business executives are sounding alarms that a severe memory shortage could cripple electronics companies well into 2030 and beyond, with major players like Sony and Microsoft facing potential delays for their next-generation gaming consoles. The crisis, driven by surging demand from artificial intelligence data centers, threatens to reshape the entire technology landscape.
AI Demand Sparks Unprecedented Supply Crunch
Since late last year, prices for DRAM (dynamic random access memory) have skyrocketed as tech giants like OpenAI and Google consume vast resources to build AI infrastructure. This has created a fierce competition for the remaining chip supply from manufacturers such as Samsung, Micron, and SK Hynix, leaving other companies scrambling for components.
The shortages have already impacted firms like Valve, potentially leading to price increases for its upcoming Steam Machine hardware and limited availability of the Steam Deck. However, industry experts warn this could be just the beginning of a much larger catastrophe.
CEO Predicts 'Massive Die-Off' in Consumer Electronics
In a recent YouTube interview, Pua Khein-Seng, CEO of Taiwanese electronics company Phison, issued a dire warning: the memory shortage will trigger a "massive die-off" among consumer electronics companies, with some facing bankruptcy as early as this year. While the original interview was in Chinese without English subtitles, translations provided by X user 駿HaYaO and PC Gamer summarize his alarming predictions.
According to these translations, Khein-Seng stated: "From the end of this year to 2026, many system vendors will go bankrupt or exit product lines due to a lack of memory. Mobile phone production will be reduced by 200-250 million units, and PC and TV production will be significantly reduced."
Unprecedented Payment Demands and Long-Term Shortages
The CEO further revealed that memory manufacturers are now demanding three years' worth of pre-payment from clients—an unprecedented move in the electronics industry. Internally, these manufacturers estimate the shortage could persist until 2030, potentially lasting another full decade.
While Khein-Seng didn't name specific companies at risk, he warned that "large numbers of low-margin brands will exit" in the second half of 2026, and "low-end products will disappear" from the market entirely.
Major Console Makers Brace for Impact
Although neither Sony nor Microsoft could be described as low-margin brands, both are preparing for significant impacts from the memory crisis. In recent financial results, Sony's chief financial officer Lin Tao outlined strategies to offset rising memory costs by focusing on "monetising the installed base" and growing software and network services revenue.
While Tao didn't specify exact plans, industry analysts suggest this could mean price increases for PlayStation Plus subscriptions, more game releases, and other methods to generate revenue from existing PlayStation 5 owners. Microsoft is likely developing similar contingency plans for its next Xbox console launch.
Gaming Industry Faces Uncertain Future
The memory shortage raises serious concerns for the gaming industry's long-term stability. With console launches potentially delayed and hardware prices rising, consumers may face higher costs and limited availability. Companies across the tech sector are now forced to rethink their supply chain strategies and business models to survive what could be a decade-long crisis.
As the situation develops, industry watchers will be monitoring how major players adapt and whether Khein-Seng's grim predictions materialize. For now, the memory shortage represents one of the most significant challenges the electronics industry has faced in decades.
