Binance: AI chip demand may keep inflation and rates high

Binance Research warned that rising demand from artificial intelligence data centers has pushed memory prices sharply higher. DRAM prices rose roughly sixfold over the past year as High Bandwidth Memory, server DRAM and enterprise storage are redirected to AI infrastructure, reducing supply for smartphones and personal computers.

The report projects capacity to expand by about 30% by 2027 but still finds gaps between supply and expected demand: roughly a 15% shortfall for PC memory and about a 12% shortfall for smartphone memory. Binance Research estimates DRAM undersupply could remain near 17% through 2026, and shortages of NAND flash may persist into 2028.

Three suppliers-Samsung, SK Hynix and Micron-account for roughly 90% of DRAM production and for all HBM output, giving those firms large influence over available capacity. Large cloud operators are securing chip supply with multiyear contracts, which further limits the volume available to consumer-device makers.

Binance Research estimates the direct effect on headline inflation is small, adding about 0.10 percentage points to the Consumer Price Index, because consumer electronics have a low weight in the CPI basket. The report describes additional channels by which higher memory prices can affect the economy: increased corporate costs, higher cloud bills, slower device upgrade cycles and reduced product specifications by manufacturers.

The report links persistent, supply-driven memory price pressure to possible central bank responses. It notes that elevated chip-driven costs could delay interest-rate cuts or prompt reconsideration of further hikes, and states, “There is no near-term policy fix.” The research also notes that tighter liquidity associated with delayed easing tends to weigh on risk assets in the short term.

On crypto markets, the research presents mixed implications for Bitcoin. Near-term pressure from higher rates and constrained liquidity can hurt risk assets. The report added a longer-term view: “Bitcoin and assets like it don’t get cheaper in a world of persistent, supply-driven inflation. They get more relevant.” Binance Research noted Bitcoin traded near $65,700 and had fallen about 17% over the past month.

The report contrasted the chip situation with another inflation factor that has eased: an agreement reopening the Strait of Hormuz coincided with oil prices falling about 4% in a single session. Binance Research emphasized that while energy pressure eased, memory price inflation remains a separate and less visible issue. The report concluded that how markets price the risk will depend on the pace at which new memory production ramps and how top suppliers allocate output between AI infrastructure and consumer devices.