The artificial intelligence craze likely just delivered more industry-wide price hikes on household electronics.
After accepting billions in taxpayer subsidies, the technology company Micron is shutting down its generic line of consumer-facing chip products to instead focus exclusively on its megacorporation AI customers.
The move is expected to drastically limit market competition and raise prices for essential materials for personal computers, gaming consoles, and other electronics.
Earlier this month, Micron announced it would end production of its “Crucial” product line, which includes memory storage units such as dynamic random-access memory (DRAM) and solid-state drives (SSD).
Micron was just one of three global technology firms that controlled the bulk of DRAM and SSD production. With Micron’s exit, the market will now effectively consolidate into a duopoly between South Korean chipmakers SK Hynix and Samsung.
The exit reduces competition and gives the remaining firms more market power, potentially allowing them to jack up prices on consumers. Even before the recent move, prices for DRAM products spiked by 170 percent in the past year.
Micron says it’s exiting the consumer market to put its resources toward the booming data center and artificial intelligence buildout, which is powered by semiconductors made by a small collection of giant technology companies, including Micron. Micron is one of the main suppliers of semiconductor circuit boards to dominant chip designer Nvidia.
“The AI-driven growth in the data center has led to a surge in demand for memory and storage. Micron has made the difficult decision to exit the Crucial consumer business in order to improve supply and support for our larger, strategic customers in faster-growing segments,” reads the announcement. According to critics, Micron is chasing higher profit margins from well-financed AI customers willing to pay top dollar at the expense of the general public.
The AI…
Auteur: Luke Goldstein
