By the end of 2025, the price of electronics such as computers and smart phones started to increase. LIMS explained that this increase is due to supply crunch in the global semiconductor market driven by the rapid expansion of artificial intelligence. Massive investments in data centers and AI servers were absorbing large volumes of advanced memory and processing chips, overwhelming existing production capacity.

LIMS stressed that the chip shortage is structural. Semiconductor production is extremely capital-intensive, with new fabrication lines costing $15–20 billion and taking three to five years to become operational. After past boom–bust cycles, producers have become risk-averse, preferring to raise prices rather than expand capacity for fear of future demand collapses. At the same time, AI buyers are willing and able to pay far more than consumer electronics firms, diverting production toward high-margin chips and crowding out consumer markets. High barriers to entry, including technological complexity, specialized equipment, capital intensity, and export controls, prevent rapid supply expansion.
 
LIMS highlighted stark distributional effects. Price increases are expected to be steepest for premium devices, potentially reaching 30 percent. Wealthier markets, especially Gulf countries, are better positioned to absorb these costs and secure supply. While lower income consumers are expected to delay upgrades, buy older models, or turn to second-hand devices. Lower-income countries will see a reduced availability of high-end technology altogether, widening the technological divide between high- and low-income economies.

• Artificial Intelligence Changes the Rules of the Game: How Will Global Markets Be Affected? December 16, 2025: Alaraby, Video Interview (AR)