Technology prices to rise: electronics prices soar before Christmas

An NIQ report underscores this development. According to the report, virtually all IT product groups that use memory chips are affected by the rising costs. “This effect is already clearly noticeable for customers,” said expert Andreas Peplinski. In September, the average prices of graphics cards were almost double those of the previous year. Desktop PCs increased in price by 41 percent, while laptops and tablets recorded double-digit percentage increases. A significant price increase is also being observed in smartphones.

The reason for these price increases lies in a classic market cycle, the so-called “boom and bust cycle.” After a boom during the Corona pandemic, there was a surplus of memory, which led to a price decline. Manufacturers responded by throttling production and cutting investments. Now, however, demand, particularly due to the expansion of data centers for Artificial Intelligence (AI), has increased explosively, while production cannot be adjusted quickly enough.

Manufacturers are currently prioritizing the production of specialized components for AI servers, which leads to a massive deficit in standard memory. This drives up the purchase prices for electronics manufacturers and burdens end consumers. The Digital Association Bitkom warns that the component shortage is putting the IT market in distress and making it difficult to calculate prices for electronic devices.

The German Retail Federation (HDE) expresses concern about the upcoming Christmas business. The majority of non-food retailers expect poorer business than in the previous year, as consumers calculate more price-sensitive and reconsider major purchases in consumer electronics and IT.

Consumer advocates advise increased vigilance during Black Friday promotions and recommend critically examining offers and comparing price developments. Market analysts expect memory capacities to remain tight well into next year and that prices will remain high.