The global shortage of memory chips, fueled by soaring demand for artificial intelligence, is now hitting the automotive sector hard. According to a Nikkei Asia report, two major automakers, General Motors and BYD, have announced price increases directly linked to rising component costs. GM estimates an additional cost of $1.5 to $2 billion for this year, while BYD has already raised prices for its driver assistance features by 20%. Hyundai has also urged domestic chip manufacturers to strengthen the local supply chain.
DRAM and NAND scarcity impacts modern vehicle features
GM CFO Paul Jacobson stated during the earnings call that new vehicle prices are expected to rise by 0.3% this year, reversing earlier projections of stable or slightly lower costs. The primary driver is the surge in DRAM prices, essential for infotainment, ADAS, and autonomous driving systems. Micron reported that in 2023 the average vehicle used 90 GB of DRAM and NAND, and forecasts this will jump to 278 GB by 2026, with high-end models requiring up to 2 TB. A British OEM broke down the memory needs: infotainment systems require 4 to 16 GB, ADAS and safety systems need 8 to 32 GB, and centralized systems start at 16 GB and can go up to 64 GB or more. With AI assistants arriving in cars, requirements will climb to at least 256 GB. For Level 4 autonomous vehicles, Micron predicts a minimum of 300 GB of RAM.
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Automotive chips are highly specialized, slowing production
Unlike PC chips, automotive memory must undergo rigorous validation processes lasting months or years, to withstand vibrations, temperature extremes, and weather. This means the current shortage disproportionately affects the automotive industry, with longer lead times and escalating costs. For the end consumer, this translates into record-high new car prices, already at all-time highs. If the chip shortage continues, we may see delivery delays and reduced availability, similar to the 2021 pandemic crisis. For context on tech outages, check the article on Amazon Alexa down for an hour. Additionally, pricing trends are analyzed in the piece on Samsung Galaxy Z Fold 8 pre-orders.
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Future outlook for the automotive industry
Uncertainty over specialized memory chip availability may push automakers to rethink sourcing strategies and invest in in-house production. Meanwhile, rising costs are reflected in price tags, making cars less affordable. Analysts warn that the automotive sector will face continuous price pressure until advanced memory supply stabilizes. As reported by authoritative sources like Tom's Hardware, the situation demands constant attention from both manufacturers and consumers.
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