Demand for AI data centers could trigger a new chip shortage that will once again impact auto production – Jalopnik

One thing the pandemic chip shortage has made clear is how much the auto industry depends on microchips. We (mostly) narrowly avoided one last year, but now an 800-pound gorilla is threatening the global supply of memory chips: AI data centers. Like the Borg Collective, demand for memory from AI data centers is assimilating the industry, and resistance is futile.

Western Digital and Seagate, two of the leading hard drive manufacturers, have already sold out most of their 2026 inventory, according to figures Heise Online. Counterpoint research reports that the cost of memory chips increased by 90 percent between the fourth quarter of 2025 and the first quarter of 2026. As a result, Dell has increased its computer prices by 15 to 20 percent, and Lenovo is expected to raise prices as well, according to TrendForce News.

Micron announced in a press release that it will shut down its consumer operations at the end of February “to improve offerings and support for our larger, strategic customers in faster-growing segments,” said Sumit Sadana, EVP and Chief Business Officer at Micron Technology. Just over two years ago, Micron posted a blog all about how crucial memory chips are for modern cars.

“DRAM shortages will persist throughout the year in the electronics, telecom and automotive industries,” said Counterpoint analyst MS Hwang. “We are already seeing signs of panic buying within the automotive sector, as smartphone makers turn to more cost-effective chip alternatives to soften the impact.”

At last week Wolfe research Ford CFO Sherry House said “This is something we are actively working on. We currently believe we have access to sufficient supply, but we are seeing pressure on prices and that is included in our future plan.” Elon Musk may not be our favorite person, but of all people he is in a unique position with the increasingly intermingled nature of Tesla and xAI, not to mention SpaceX launching data centers into space. He is even talking about making his own chips to meet his own demand Bloomberg:

“To remove the likely limitation within three or four years, we will have to build a Tesla TeraFab,” Musk said on the automaker’s earnings call on Wednesday. “A very large fab that includes logic, memory and packaging, in its own country.”
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“We’re going to hit a chip wall if we don’t do it,” Musk said, referring to the industry term for a chip factory, in a recent podcast with Peter Diamandis, founder of the X Prize Foundation. “We have two choices: hit the chip wall or create a fab.”
In November, Musk similarly told Tesla shareholders that the company might have to build a “TeraFab,” saying, “I don’t see any other way to get the amount of chips we’re looking for.”

As if we pollute the air we breathe, the water we drinkAnd stealing the jobs we work in is not enough, AI now seems ready to gobble up all the memory chips like Cookie Monster eats cookies. That means we can expect shortages of cars, computers, smartphones and anything else that uses chips, as well as skyrocketing prices for what little is available. The situation could get even worse if/when the AI ​​bubble bursts. I better get that Xbox memory upgrade before it’s too late.