PC price hikes and a test for Taiwan

Hi everyone! This is Cheng Ting-Fang, your #techAsia host for this week, waving hello from Taipei.

We are living through an inflationary era for almost everything, be it consumer electronics or real estate, and supply chain bottlenecks have become one of the biggest headaches for industries ranging from AI chips to petrochemicals, the building blocks of a long list of electronics materials.

The causes are piling up: AI demand has been squeezing just about every corner of the tech supply chain for months, pushing up prices of memory chips, substrates and advanced packaging. More recently, the Iran war has led to the blockage of the Strait of Hormuz, disrupting shipments of oil, gas and industrial inputs.

This week, I had a chance to visit Elite Semiconductor Microelectronics Technology, a memory chip developer mainly focusing on niche segments in the legacy memory business. Its core product portfolio still centers on DDR2 and DDR3 – DRAM technologies first introduced in 2003 and 2007, respectively. Though often overlooked, older memory chips remain essential for a wide range of electronic devices, such as router and IP cameras, long after the spotlight has moved on to newer tech. (The most up-to-date DRAM used in premium computers and servers is DDR5.)

But even DDR2 and DDR3 prices are surging due to spillover effects from AI demand. Contract prices for these chips have already doubled compared with last year, and the upward trend shows little sign of slowing.

Ming-Chien Chang, chairman of Elite Semiconductor and a veteran of the industry, shared his observations with Nikkei Asia. “This is really the strongest memory supercycle I have ever seen. It reminds me of the last very robust one, in the 1990s, when personal computers began to really take off, but with AI, it seems it’s even stronger this time around,” Chang said. “And it appears to be lasting longer, rather than being just a short-term effect.”

The shortages, he added, are everywhere: “Shortage of chip production, shortage of chip substrates and even shortage of probe cards for chip testing.”

Shortages and price hikes are visible even in everyday life. Out of curiosity, I went to see a presale real-estate project only a few blocks from my home in Taipei over the weekend. A two-bedroom apartment there is priced at around $1.56 million, more than double what similar units cost a decade ago. The developer says the 29-story mixed-use office and residential complex will not be completed until 2032, six years from now, due to surging material costs and a persistent shortage of construction workers.

Pricier PCs

It will cost significantly more – up to several hundred dollars – to buy a new laptop or smartphone this year as major PC makers, including HP, Dell, Lenovo, Asus and Acer have already raised prices or are planning further hikes, Nikkei Asia’s Cheng Ting-Fang and Lauly Li report. Apple, for instance, has increased the starting price of its most premium laptop by $400.

The memory crunch is also hitting the smartphone market, with China experiencing one of the largest and most widespread price hikes in its history. The increases are affecting nearly all brands and product segments.

Some pessimistic forecasts suggest that unit shipments for both smartphones and laptops could decline by more than 12% this year due to the ongoing shortage. Industry executives say price increases are inevitable, as lowering specifications or component quality is not an option for high-end premium computers and handsets. “Otherwise, what’s the point of buying a premium product?”

Dialing into AI

Samsung wants to strike new strategic deals with AI groups to integrate a variety of models into its smartphones in an effort to erode Apple’s lead in the global market, writes the Financial Times’ Michael Acton.

TM Roh, the South Korean tech giant’s consumer device chief, told the FT it was “open to strategic co-operation” with more AI groups such as OpenAI, having recently added the Perplexity AI search engine to its mobile operating system.

He said Samsung’s research shows consumers are increasingly using several AI services rather than relying on a single platform, adding that greater choice could help Galaxy devices stand out in a market where Apple has yet to roll out many of the AI features it unveiled last year.

“We got into the preparation earlier than others, [and] that is how we have taken and maintained leadership in mobile AI,” said Roh, who is co-chief executive of Samsung Electronics.

The maneuvering highlights how AI is becoming the next front in the battle for smartphone users. With global handset sales stagnating and hardware upgrades offering only marginal gains, manufacturers are betting that AI-powered assistants and search tools will influence which brand they buy next.

A test for Taiwan

Taiwan, a key tech hub in Asia, faces mounting challenges to its energy resilience as the U.S.-Iran war severely disrupts global energy and raw-material markets. As an island economy, Taiwan relies heavily on imported energy, particularly oil and liquefied natural gas (LNG) from the Middle East, making it increasingly vulnerable as tensions escalate, Thompson Chau, Cheng Ting-Fang and Lauly Li report.

For instance, Taiwan’s largest LNG supplier is Qatar, accounting for more than 33% of its imports, while nearly 70% of the island’s oil imports come from the Middle East. Taiwan’s LNG reserves, the most important fuel for its electricity generation, cover only about 11 days of demand, meaning any disruption in inputs could quickly affect the chip and broader tech supply chain.

Consultancy firm BowerGroupAsia says the current disruption, including the blockage of the Strait of Hormuz, is a “live stress test of Taiwan’s energy security.”

Open season on OpenClaw

OpenClaw, an open-source AI agent application that allows users to operate computers through natural language commands, was developed by Austrian developer Peter Steinberger, who joined OpenAI last month after the application went viral.

The tool has generated particular excitement in China. Local governments in several provinces are racing to promote its development and adoption, despite the central government’s repeated warnings about vulnerabilities in Western-developed tech and the difficulty many Chinese users have installing such tools, Nikkei Asia’s Cissy Zhou writes. For some, the frenzy calls to mind last year’s state-backed push to integrate national AI champion DeepSeek.

At the same time, Chinese tech giants and AI startups, including Tencent and Baidu, are working on localized versions of OpenClaw. These would replace the application’s underlying “brain” with domestic AI models and process data on Chinese servers, addressing geopolitical concerns over data security.

Suggested reads

1. Taiwan’s No. 2 chipmaker UMC bets on next-gen optical tech amid AI boom (Nikkei Asia)

2. SoftBank’s bet on OpenAI is starting to weigh (FT)

3. Australian software company Atlassian cuts 1,600 jobs, citing AI shift (Nikkei Asia)

4. Lynas secures rare earths price floor in updated Japan supply agreement (Nikkei Asia)

5. Is South Korea’s dominant online retailer an American company? (FT)

6. Big Asian social media markets step up ban on access for under-16s (FT)

7. Bhutan seeks economic revival with special city backed by bitcoin mining (Nikkei Asia)

8. Toyota supplier Denso makes $8bn bid for Japanese chipmaker Rohm (FT)

9. Iran war sparks helium supply concerns for South Korea chip sector (Nikkei Asia)

10. US considers tying Nvidia and AMD AI chip exports to foreign investment pledges (FT)

Podcast: Tech Latest

China’s smartphones are about to get pricier

Welcome to the Tech Latest podcast. Hosted by our tech coverage veterans, Katey Creel and Shotaro Tani, every Tuesday we deliver the hottest trends and news from the sector.

In this episode, Katey speaks with Hong Kong correspondent Cissy Zhou about why China’s smartphone market is seeing one of its biggest and widest price hikes ever.

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