Lower thirds:

0:03  Report by / Patrick Fok
0:20  KL Chye/ Computer Repairman
0:27  Yap Chin Huat/ Handphone & Computer Repairs
1:21  Yap Chin Huat/ Handphone & Computer Repairs
1:48  Tanveer Ahmad / Chief Executive, Computer Safari
2:31  Tanveer Ahmad / Chief Executive, Computer Safari
3:22  Bryan MA, VP Client Devices Research

Script:

Singapore’s Sim Lim Square is a six storey maze of computers, components and cell phones… as well as electronics repairs shops.

In recent weeks an unprecedented surge in the price of RAM chips is complicating business for many of the repairmen here.

KL CHYE/ COMPUTER REPAIRMAN 0020

“Some of the customers, they may consider to postpone the upgrading of their machines.”

YAP CHIN HUAT/ HANDPHONE, COMPUTER REPAIRS

“The prices keep changing, so we cannot estimate anything.”

RAM - or Random Access Memory - is used in almost every smart device.

It’s the short term memory that lets your computer or handphone access data and apps.

In the past few months, prices have skyrocketed - in some cases by as much as 500%, depending on the type of chip.

The reason: soaring demand for them to support the expansion of Artificial Intelligence.

An AI gold rush is diverting manufacturers away from standard, consumer chips towards high-end AI chips because of better profit margins.

That supply squeeze is pushing prices even higher.

It’s not just the cost that’s impacting business for repairmen like Yap Chin Huat.

It’s also the extreme volatility.

The price of replacing chips can shift within a matter of minutes.

YAP CHIN HUAT/ HANDPHONE, COMPUTER REPAIRS

“Once we agree at this price we have to finish up at this price . If the customer walks away and comes back, we will quote him again. We will ask our supplier for the price.”

Tanveer Ahmad is a memory chip trader at Sim Lim Square.

He says in the past two months, as customers shun cost increases, he’s lost about half of his regular business.

To manage the situation, he’s cutting back on inventory. 

TANVEER AHMAD, CHIEF EXECUTIVE, COMPUTER SAFARI 0151

“We are now thinking hold it. Don’t buy a lot of stock. Just take maybe three or four models and don’t keep stock so much because we don’t know - suddenly maybe it can go down as well.”

Ahmad’s also avoided stocking the newest generation DDR5 chips.

He’s worried he’ll be stuck with them if people refuse to pay the higher prices.

In October, a 64 GB kit retailed at around $200.

Now, they’re selling for more than $1,000.

The spike is also hindering efforts to expand Singapore’s AI workforce.

TANVEER AHMAD, CHIEF EXECUTIVE, COMPUTER SAFARI  0524

“Here in Singapore the government is encouraging people to learn AI and they are subsidising courses as well so when people are going to learn and take these course they need their computers, and those computers, especially those laptops, they need at least, minimum 1 terabyte of SSD and and minimum 32 GB of RAM.”

Many businesses and individuals are holding off or opting for less advanced upgrades.

And the ripple effects extend beyond repair shops.

Tech research firm IDC calls it a memory “crisis” and predicts the worldwide PC market will decline by 11.3 percent this year.

The smartphone market could shrink by 12.9 percent.

BRYAN MA, VP CLIENT DEVICES RESEARCH

“There’s supply limits that are limiting the market but there’s also elasticity issues.”
(TRIM @0356)
“From a demand perspective, inevitably as these price increases happen the phone and smart phone prices have to raise their prices and basically pass some of that on, to the degree that they can absorb some of the margins , but the reality is if the prices are going up too much it can’t absorb that in the margin so they have to pass on those prices to consumers.”

As the AI race reshapes the chip industry, everyday devices could become the hidden cost of tomorrow’s computing power.