GM, BYD raise prices as AI memory shortage hits auto sector
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General Motors and BYD have raised vehicle prices, citing rising costs from an AI-driven memory chip shortage. GM expects a $1.5-2 billion cost increase this year, while BYD hiked driver assistance feature prices by 20%.
Price Hikes and Cost Pressures
General Motors said it expects new vehicle prices to rise by 0.3% this year, reversing its earlier forecast of stable or lower costs, according to Nikkei Asia. GM Chief Financial Officer Paul Jacobson cited increasing component prices, especially DRAM, as the main driver. BYD raised prices of its driver assistance features by 20% in China. Hyundai also called on domestic chipmakers to strengthen local supply chains.
Memory Demand in Modern Vehicles
Micron said the average vehicle used 90GB of DRAM and NAND in 2023, projecting that to jump to 278GB by 2026, with high-end models requiring up to 2TB. A British OEM breakdown shows infotainment systems need 4-16GB, ADAS and safety systems 8-32GB, and centralized systems 16-64GB or more. AI assistants could push requirements to at least 256GB, while level 4 autonomy may need 300GB of RAM, per Micron.
Validation and Supply Chain Challenges
Automotive memory chips are specialized parts requiring months or years of validation to withstand environmental factors like vibration, heat, and cold. This makes the current shortage particularly severe for automakers. Tom's Hardware warns that continued shortages could lead to delivery delays and availability issues worse than the 2021 pandemic-era disruptions.
What's Next
Automakers are expected to pass further cost increases to consumers if memory prices continue to rise. It remains unclear how long the shortage will last or whether new chip fabrication capacity will come online in time to meet demand.
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GM, BYD raise prices as AI memory shortage hits auto sector
