Small Traders Face Bankruptcy as 2026 Crisis Worsens

The global memory chip shortage, triggered by the artificial intelligence (AI) boom, has hit the consumer electronics industry hard, affecting devices such as mobile phones, laptops, game consoles, and household appliances. Many electronics manufacturers have been forced to raise selling prices as supply chain disruptions cause component costs to balloon. Even tech giants like Apple and Microsoft have not been immune. Apple recently announced price adjustments for certain MacBook and iPad models, citing component cost increases at unprecedented levels. If cash-rich giants with solid supply chain capacity are affected, what is the fate of small traders? At the start of this year, Mono Technologies assembled and shipped around 1,000 units of its flagship product, a router development tool priced at US$600. Co-founder Tomaz Zaman, who established Momo in 2024, received a positive initial reception from networking enthusiasts who used the product to speed up their internet connections. Just as the business began to shine, Mono was hit by the memory chip crisis, making all electronics production costs super expensive. Zaman admitted he was at a loss, especially with 1,300 customers having already paid a US$100 deposit for the next production run. The cost for 8 gigabytes of DRAM from Micron that Mono uses has skyrocketed to US$300, compared to US$35 when he first developed the product. Zaman said his three-person company has yet to decide whether to proceed with a second production wave with a price increase of at least a third, or to launch a new model with 75 per cent less memory capacity. He noted that even for a router in their class, the quality would be very poor at a selling price of US$900 to US$1,000. Zaman’s experience is becoming common across the consumer electronics market, from established devices like iPads and Xbox consoles to niche products that have just passed the testing phase. The sharp rise in component prices has shaken global supply chains due to the AI explosion. This boom has led established chip manufacturers like Nvidia to absorb ever-increasing amounts of memory for their advanced processors and systems. As a result, production of conventional memory chips for consumer electronics has been sidelined, leading to scarcity. When tech giants like Apple and Microsoft announced price hikes this week, alarm bells rang louder. They possess large cash reserves, strong bargaining power in the supply chain, and customer bases numbering in the millions or billions. In contrast, a much broader range of businesses faces a potentially dire situation. Most consumer electronics companies operate on thin profit margins and cannot confidently raise prices amid an economy grappling with inflationary pressures. Action camera maker GoPro, already struggling, warned this month it could face bankruptcy after memory component costs surged between 80 per cent and 115 per cent by the end of the first quarter. Meanwhile, speaker manufacturer Sonos’s shares have fallen 23 per cent this year due to memory price pressures on its margins. An IDC analyst described the current situation as a ‘real existential crisis’ for companies like small-scale Android phone manufacturers or local players producing devices priced under US$100, stating they will be unable to secure memory supplies because suppliers are only serving demand from major players.