Storage Crisis in China's Automotive Sector China's "Digital Gold": Memory Chips As Valuable As Gold

Memory chips are increasingly becoming a cost driver in the automotive industry—especially in China. Significantly rising prices for DRAM and NAND components are putting manufacturers under pressure and intensifying competition for available capacity.

Memory chips have a new nickname in the Chinese automotive industry. The Chinese trade press now calls them "digital gold" because their prices are rising even faster than those of the precious metal. The business magazine 21 Shiji Jingji Baodao reports that an 8 GB eMMC chip from Samsung, which cost around 50 US dollars at the beginning of the year, has now become twice as expensive at around 100 dollars. Such chips are used in vehicle infotainment systems and many other digital instruments.

Prices for automotive DDR4 and DDR5 chips have even risen by 150 and 300 percent respectively since September 2025, writes TrendForce. Chips for the automotive industry have once again become the overriding topic of conversation in the Chinese semiconductor industry.

The Memory for the Car

Memory chips are only a small part of the thousands of semiconductors that are installed in a modern car. However, they are responsible for "memory and thinking", as one of the reports put it quite vividly. DRAM (Dynamic Random Access Memory) takes over the real-time processing of data in an intelligent cockpit and "perceptual computing" in autonomous driving functions, i.e. it is similar to the RAM of a laptop.

LPDDR (Low-Power DDR), the energy-saving variant, is already standard in digital cockpits. NAND flash stores navigation, entertainment and log data. Typical designs are eMMC (embedded MultiMediaCard) and UFS (Universal Flash Storage). HBM, i.e. high-bandwidth memory, is increasingly being installed in premium models so that the ever larger AI models can run directly in the cars themselves.

AI Boom is Once Again the Price Driver

There are two mutually reinforcing developments behind the current price surge. Samsung, SK Hynix and Micron, which together currently control around 90 percent of the global DRAM market, are shifting part of their production capacity to the operators of AI data centers. There is currently enormous demand there.

Automotive demand is estimated to account for less than five percent of the global market for memory chips. However, it continues to grow because intelligent cockpits and end-to-end models for autonomous driving are consuming more and more capacity. Car manufacturers are currently facing unfamiliar competition from the financially strong and investor-favored operators of AI data centers. "We simply can't keep up. Their investments are in the hundreds of billions of dollars," Li Bin, founder and CEO of NIO, told journalists.

Storage Crisis Continues

Regardless of the industry from which the orders come, there is a global shortage of memory chips. This could continue until 2030, partly due to known shortages of silicon wafers, as the head of the SK Group, Chey Tae-won, recently predicted at the Nvidia GTC conference in San José, California.

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This situation reminds many buyers of the time of the coronavirus pandemic. Back then, they were forced to travel halfway around the world in search of chips. Lotus CEO Feng Qingfeng told the Chinese business magazine that he flew from China to the USA six times to secure delivery commitments for semiconductors.

The first car manufacturers are already passing on the price pressure to their customers. Chery raised the price of the top version of its Exeed ET5 by 5,000 yuan (around $700) in March. BYD's Sea Lion 06 EV became 6,000 yuan (around $830) more expensive, although this was also due to certain updates.

Other manufacturers are still hesitating because the price war in the Chinese car market is fierce. Many have concluded long-term supply contracts with chip manufacturers anyway, which delays the price shock for the time being. Examples include contracts between Li Auto and Zeekr with Micron or between VW and Hyundai with Samsung, according to Chinese automotive media.

Cushioning the Price Shock

Chery is apparently trying to control its overall costs in other ways to compensate for the price increase in chips. The manufacturer is reportedly replacing copper in its wiring harnesses with lighter and cheaper aluminum. In the long term, however, there is hardly any escape. "It doesn't matter who you sign with. If prices go up, they go up for everyone. That can't be avoided," the business magazine quotes the head of "Intelligent Driving" at a Chinese car manufacturer. "In reality, vehicle costs rise for everyone."

Prices are rising for the entire electronics industry. DigiTimes Asia writes that prices for NAND flash have risen tenfold within six months. Oppo and Vivo have already announced price adjustments for selected smartphone models from March. The Chinese government is trying to curb the price fluctuations. CXMT and YMTC, the two domestic market leaders in memory chips, have been summoned by the authorities in Beijing for the second time and asked for "strategic support" for Chinese manufacturers, DigiTimes Asia reported.

However, prices are mainly set elsewhere. Chinese manufacturers are gradually catching up, but currently still hold less than five percent of the global market for automotive memory. Meanwhile, the largest international manufacturers of memory chips are reporting record profits. According to its own annual report, SK Hynix more than doubled its net profit in 2025 to around $29 billion. At Samsung Electronics, the operating profit of the semiconductor division rose by 465 percent in the fourth quarter of 2025, writes 21 Shiji Jingji Baodao. At Micron, the gross margin rose from 23.7 to 40.9 percent in 2025 compared to the previous year. (sb)