Artificial intelligence demand likely to raise electronics prices

As Hallee Mandryk reports, as artificial intelligence becomes more common, the tech required for personal devices is becoming very expensive.

While many people may not know exactly what Random Access Memory, or RAM, is, most use it daily without realizing it.

Cellphones, computers, gaming systems, televisions and even many vehicles rely on RAM, in the form of a flat circuit board with memory chips attached, to function properly.

“If we talk about, a computer as a car, a car needs an engine to run it, and that’s your processor that your car and your engine need gasoline for the car to move, and that’s what your RAM does,” said Kyle Docken, store manager at one of Saskatoon’s several Visions Electronics locations.

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As Artificial Intelligence, or AI, becomes more widely used, the demand for more powerful memory is driving up RAM prices. The type of RAM commonly used in consumer electronics is not sufficient to support advanced AI systems.

“There’s the traditional RAM that we all use in phones, cars, laptops and gaming consoles, and then there’s what AI needs — a different product known as high-bandwidth memory,” said Devan Mescall, a professor at the University of Saskatchewan’s Edwards School of Business. “It’s similar in concept, but it’s built very differently.”

As major producers work to create the necessary technology to meet the increasing demands of AI, less resources are being dedicated towards producing traditional RAM technology.

Docken noted the decrease in supply has already resulted in increased prices for technology that requires RAM and estimates that about 60 per cent of the products in his store require RAM to function.

“Well RAMs are pretty important part of computers and you know RAM is going to be about three times more expensive comparatively to what it was even last year or last month,” he said.

“It’s never fun having to sell people things for more money than it was say, six months ago. But, there’s not really a concern. I guess we’ve got to wait and see what happens.”

Mescall said the issue is not just exclusive to Saskatchewan.

“iPhones that are produced around the world, they come to Saskatoon, Toronto, New York. So they’re all coming from the same place. So if that if they’re having to pay higher inputs for their production, that’s going to play through everywhere,” he said.

While many consumers prefer to wait for the latest technology, Mescall suggests those planning major purchases may want to buy sooner rather than later.

“You might get better performance by waiting for the next version, but that will likely come at a higher cost,” he said.

Mescall predicts manufacturers could meet demand within the next two years, though that does not guarantee prices will fall.