The cost of RAM (Random Access Memory) chips used in modern electronic devices such as computers, smartphones, digital cameras, routers, smart TVs, printers, and more is constantly increasing. This has also increased the price of the devices, and consumers around the world are suffering. In Nepal too, the price of gadgets has almost tripled in the past one and a half months.

International media outlets have reported that the price of RAM and SSD (storage) has increased due to the high demand for artificial intelligence and the decrease in production and supply. Currently, big tech companies around the world are building large data centers to run AI systems like ChatGPT and Gemini. These AI servers require a large amount of high-capacity RAM called ‘HBM’. A graphics card or GPU is required to run AI, and GPUs help speed up complex calculations. 

High HBM is required to run GPUs. Microsoft, Google, Amazon, and others are buying this HBM RAM in large quantities for their AI servers. Due to this, the general ‘DRAM’ used in laptops, smartphones, or ordinary computers has become less available in the market, due to which the overall price of RAM has skyrocketed.

The three main companies that manufacture DRAM – Samsung, Micron and SK Hynix – are focusing on producing HBM and other high-capacity chips used in AI servers instead of regular RAM used in smartphones or laptops. As this gives them more profit, their interest in producing regular RAM has decreased. This has led to a decrease in supply but a rise in demand, while the prices of consumer-grade RAM, SSDs and digital devices have increased sharply. 

In Nepal, all electronic equipment is imported from abroad and the increase in the value of the dollar has increased the cost of imports and the market price of the devices has also increased. According to foreign trade data released by the Customs Department, 47,046 laptops and notebooks were imported into Nepal for 3.19 billion 7.464 billion rupees in the current fiscal year.

These devices have been imported from countries including China, Vietnam, Malaysia, Thailand, and the United Arab Emirates. As of October, 8,667 tablets worth 237 million rupees, 5,200 data processing machines worth 169 million rupees, 317 servers worth 249.4 million rupees, 50,159 internal hardware worth 156.6 million rupees have been imported.

The shortage of RAM chips has caused the price of computer equipment in Nepal to increase by almost three times, says Ranjit Podar, the outgoing president of the Computer Association Nepal (CAN Federation). The global shortage and price increase of chips used in computer equipment such as processors, RAM and SSDs in Nepal has had a major impact. ‘The price of memory cards has doubled or tripled,’ he said. ‘This problem has been visible for the past one and a half months.’

Podar says that the main reason for the price increase is that artificial intelligence companies are now buying the chips produced by chip-making companies in large quantities. The problem has arisen because goods that were previously available in the market are now being sold to 10-15 large technology companies.

‘When buying large memory cards like 16 GB or 32 GB, the price has doubled or tripled,’ he said. ‘The price of processors has also increased by 5,000 to 10,000 rupees. A processor that was available for 30,000 rupees yesterday has now reached 40/45 thousand or 50 thousand rupees.’ He said that branded desktops are 5,000 to 7,000 rupees more expensive. 

Although the fluctuation of the US dollar also affects prices, the current price increase due to chips and AI is very different from the normal fluctuation of the dollar, Podar explained. ‘Even if there is one rate today, tomorrow there may be another rate,’ he said. ‘A situation has arisen where people cannot get the goods they ordered the day before at that rate the next day. Due to this, while there was already a moderate demand, the demand is now decreasing due to the price increase.’