The global artificial intelligence boom has triggered a severe memory chip shortage, dubbed the “RAMpocalypse” by tech enthusiasts, which is driving up consumer electronics prices by as much as 50 per cent while fuelling an unprecedented windfall for Malaysia’s semiconductor industry, particularly in Penang.
In Malaysia, the cost of consumer-grade random access memory (RAM) and storage devices has more than doubled in 2026 from a year earlier, pushing computer and smartphone prices sharply higher. The shortage, which has worsened since 2024 as producers pivot to supply the more lucrative AI market, has left gamers and casual users alike feeling the pinch.
Esports organiser Orange Esports bought 20 top-end gaming computers for the Samsung-backed Counter-Strike 2 Championship in December but immediately sold them all afterward, citing prohibitive upgrade and upkeep costs. The company has also shelved plans to upgrade its internet cafes until 2027 or beyond.
Yet for Malaysia’s chip sector, particularly in Penang, the story could not be more different. Integrated circuit (IC) exports, Malaysia’s single largest export accounting for a quarter of all shipments, surged more than 24 per cent in 2025 to RM389 billion (S$125 billion). Electrical and electronics (E&E) exports grew 18 per cent in 2025 and accelerated to 26.7 per cent year-on-year in the first quarter of 2026, far outpacing Malaysia’s overall export growth.
Malaysia holds an estimated one-eighth of the global semiconductor supply chain, mostly in back-end packaging and testing. Penang alone accounts for over 60 per cent of the country’s E&E exports.
Wong Siew Hai, president of the Malaysia Semiconductor Industry Association (MSIA), said demand for high-bandwidth memory (HBM) is so strong that new orders may not be fulfilled until 2028 unless more capacity comes online.
“We don’t see this going away, there is nothing on the horizon that tells us this will end,” he said.
Chipmakers in Penang are racing to expand. UWC, a Penang-based semiconductor equipment maker, saw its order books surge from RM150 million in 2024 to RM180 million in 2025 and an estimated RM250 million by mid-2026. Deputy chief executive Matin Ng said the company is now offloading manufacturing to local suppliers to keep up.
“Anything to do with AI is doing very well now. The forecast numbers our customers are sharing show massive jumps to the point where we are offloading manufacturing to our local suppliers,” he said. “Now I’m in negative cash because my order books have been picking up strongly but we are still looking into more expansion.”
Unisem, another major Penang chipmaker, has seen its AI and datacentre share of sales grow from a single-digit percentage before 2024 to nearly 20 per cent today. Chief operating officer Kevin Khoo said the lesson from the pandemic is clear.
“The lesson from Covid-19 is that if I had contingency for space, I would have captured market share,” he said.
Penang’s expansion is not without constraints. The state literally ran out of piling cranes during the current expansion wave. InvestPenang chief executive Loo Lee Lian said authorities are now being highly selective about new investments due to limited land and labour.
“If I have a project that says I want 100 acres of land and 20,000 direct labour, we have to be very careful with that. One of our big criteria is automation to reduce manpower,” she said.
Some manufacturers, according to MSIA’s Wong Siew Hai, now lay the foundation on purchased land even before finalising a deal “because that takes the longest time”.
Micron, the US memory chip giant, has been aggressively expanding in Penang since 2018 and now occupies a footprint of more than 145,000 sq m. It has spent over RM2 billion on more than 700 local vendors in five years, building a deep supplier network. UWC is expanding into Perak and Thailand. Unisem’s new Gopeng facility has clean rooms ready for equipment, with land available for another plant.
The current boom builds on years of strategic positioning catalysed by earlier disruptions. The US-China trade war of 2018 pushed supply chain diversification out of China and towards Penang. The pandemic drove demand for consumer electronics. Higher tariffs under the second Trump administration have so far exempted semiconductors, keeping the momentum going.
For Malaysia, the AI-driven memory boom shows no signs of slowing. As Wong Siew Hai put it, there is nothing on the horizon indicating the rally will end.
Source: The Straits Times
