The boom in AI data centers is leading to a shortage of chips in consumer electronics – even if they don’t use the same types

The boom in data center construction is devouring a large part of the supply of high-tech components, especially processor and memory chips. That demand is putting a strain on consumer device makers, who are struggling to source enough chips.

This happens even though data center servers and smartphones use different types of chips. The main difference between consumer electronics and data centers is what chips need to be optimized for. Smartphones and PCs require low power consumption, thermal efficiency and tight integration. Data centers running AI systems such as large language models or LLMs require maximum computing power, memory bandwidth and storage throughput.

To meet these demands, consumer devices typically rely on systems-on-a-chip—chips that combine processing and storage—using dynamic random access memory (DRAM) and NAND, a type of nonvolatile memory. In contrast, AI servers rely on graphics processors or GPUs or other accelerator processors in combination with…