The semiconductor shortage that killed car production after the COVID-19 pandemic, we’ve lived through this and perhaps in the not-too-distant future a similar thing is happening to us.
Artificial intelligence (AI) companies are driving a spike in the price of dynamic random access memory (DRAM) chips as they build out data centres for their power- and processing-hungry applications. According to The Register consumer prices for the most common memory capacities jumped up 63 per cent in Europe during the final quarter of 2025.
S&P Global and UBS analysts say this will be a knock on for the automotive industry as chip makers are likely to focus on high-margin data centre customers rather than car manufacturers and automobile suppliers.
Matthew Beecham from S&P Global predicts prices automotive-grade DRAM could jump 70 to 100 per cent, which will likely cause “panic buying and production disruptions across the industry”.
In UBS’ view, automakers who focus on the euthanasia of autonomous driving systems like Tesla and Rivian are more at risk than legacy manufacturers (including Ford and General Motors) or other companies that have been produced. In the investment bank, disruption to automotive supply chains could begin as early as the second quarter of this year, according to the investor.
This chip shortage will be as disruptive to the automotive industry as it was for the sector post-COVID, Time will tell.
During the beginning of the COVID-19 pandemic in 2020 many automakers slashed their forward orders for computer chips ahead of a recession and enduring slump in demand.
Automakers were at the back of the queue for semiconductors when economies around the world retreated faster than they expected, forcing them to wind back production.
Some car manufacturers, who have long waited lists of cars, put more expensive models and variants to make the most profit out of them. As well as boosting prices there, many would-be new car buyers were forced to the used car market by long waiting lists.
Thanks for reading The next thing that could hurt global vehicle production
