Internationally and locally, many seemed to be caught by surprise by the current memory and component shortages and the sudden surge in prices.
But one person at the very coalface during the months-long build-up to the now looming catastrophe is Spencer Chen, CEO of Rectron. Here, he gives his perspective on how events unfolded:
For quite some time, the supply of hard drives and memory – from both WD and Seagate – has been sparse, driven by increased demand from the data centre and AI sectors for higher capacity storage. This surge in demand has led to significant price hikes from manufacturers with many entry drives transitioning to SSDs. High-capacity drives for NAS, surveillance, and data centres have become increasingly difficult to source, further driving up prices.
In addition, we faced severe memory shortages when the initial announcement around the halting of DDR4 production was announced. Although this decision was later reversed, the damage had already been done.
It started in April last year when Samsung first announced plans to stop DDR4 production, followed by Micron’s announcement in July. Consequently, DDR5 prices skyrocketed once AI began rapidly absorbing the demand.
We’ve witnessed an extraordinary 400% price increase in DDR5 over the past two quarters. For instance, a DDR5 16GB module that retailed for R1 499 now sells for R5 499 – and a DDR5 32GB module has jumped from R2 559 to R11 499.
Furthermore, Intel warned us in September about impending shortages, and shortly thereafter, 12th and 14th gen I3 and I5 stock became scarce. While the Ultra range supply remains relatively stable, Intel also implemented price increases at the end of 2025 and announced the end-of-life for 12th gen CPUs.
The current supply situation remains tight, and we lack a clear forecast for improvement.
The memory chip shortage has spilled over into the SSD and VGA card markets.
SSD prices started rising in November, with the most significant increases occurring in the past two months. A 1TB SSD that cost R1 999 in November now retails for R4 799, representing a 236% price increase.
VGA cards have also been affected, with prices increasing by 12% on average since January. The middle-tier cards, particularly 5060Ti 16GB chips, are being prioritised for desktop AI applications, making standard desktop cards harder to find. Price hikes have been occurring monthly since October 2025, with a cumulative increase of around 40%.
We anticipate an additional 40% increase by the end of March, bringing the total rise to approximately 60% – with further increases expected in May 2026.
Small core components, including Intel Core CPUs, are heavily constrained, pushing demand towards AMD Ryzen, which is now also experiencing shortages. Both Intel and AMD have raised CPU prices.
Additionally, monitor panel shortages and rising tablet prices are contributing to the overall inflation.
Even stock ordered and produced last year has seen price increases, with products being re-billed.
Vendors are struggling to mitigate these price hikes by reducing deal support. However, the increases are too substantial to absorb, leading to minimal price support and significant upfront material cost hikes. Consequently, CAPEX versus OPEX models are gaining popularity, but the deal cycle is now delayed.
The refurbished market is on the rise, but available stock has already been consumed – and replenishment may be delayed due to the time required for new devices to become available for refurbishment.
These challenges are not confined to South Africa, but are affecting brands globally. Even enterprise products, which were relatively unaffected in late 2025, are now facing significant shortages and price increases.