The Knowledge
AI data center boom is leaving consumer electronics short of chips − even though they don’t use the same kinds
Vidya Mani, University of Virginia; Cornell University
The boom in data center construction is taking up much of the supply of high-tech components, especially processor and memory chips. This demand is squeezing consumer device makers, which are having trouble acquiring enough chips.
This is happening even though data center servers and smartphones use different types of chips. The key distinction between consumer electronics and data centers is what they need chips to be optimized for. Smartphones and PCs require low power use, thermal efficiency and tight integration. Data centers that run AI systems such as large language models, or LLMs, require maximum compute power, memory bandwidth and storage throughput.
To meet these needs, consumer devices tend to rely on systems-on-a-chip – chips that combine processing and storage – with dynamic random access memory, or DRAM, and NAND, a type of nonvolatile memory. In contrast, AI servers rely on graphics processing units, or GPUs, or other accelerator processors combined with high-bandwidth memory chips.
I study global supply chains and how businesses respond to market constraints within these supply chains. The reason for the consumer electronics supply crunch has to do with the nature of the chip market: its concentration and high costs and how it responds to boom-and-bust cycles.
AI is not replacing consumer electronics; it is reorganizing the chip market around new priorities for specific chip characteristics. Data centers are pulling capital and scarce memory capacity toward the production of accelerator processors and high-bandwidth memory and the data handling and electronics equipment that surround them. https://www.youtube.com/embed/IkRXpFIRUl4?wmode=transparent&start=0 Chipmaking explained.
A winner-takes-most industry
Chip manufacturing behaves less like a competitive commodity market and more like a layered oligopoly. Scale matters because the leading firms can reinvest in research, improve yields, secure equipment and deepen customer relationships. In the case of graphics processor chips, designers such as NVIDIA, which has 85% market share, depend on advanced semiconductor foundries such as TSMC, which has more than 70% market share, to manufacture chips using extreme ultraviolet lithography machines from ASML, a monopoly.
A small number of producers both design and manufacture memory chips. Currently, three companies – Samsung, Micron and SK Hynix – hold a majority market share in the memory chips market. Long development cycles, extremely high fixed costs and the need for technological leadership reinforce concentration over time.
Consumer electronics firms such as Apple, along with other technology firms such as Amazon, Google, Microsoft and Xiaomi, increasingly design their own processor chips, because these chips shape the user experience, AI performance, power efficiency and system-level differentiation. Manufacturing memory chips, by contrast, is extraordinarily capital-intensive; requires high precision, efficiency and production line utilization; and is dominated by a few incumbent suppliers.
Since 2000, the memory chip industry has moved through repeated cycles of overcapacity and undersupply: the post-dot-com collapse, the 2007-09 glut, the tighter 2010s after consolidation, the severe 2022-23 downturn, and the AI-driven tightness of 2024-25. This has led to high levels of concentration in the industry and chipmakers that are hesitant to add capacity. Producers often operate chip fabrication plants, or fabs, at or near capacity due to high fixed costs. The risk of having expensive facilities go underused keeps chipmakers from bringing new fabs online in lockstep with demand increases.
Consolidation has reduced the number of major suppliers, who now increasingly direct investment toward higher-margin products rather than broadly adding capacity. That shift is important for understanding why AI demand is tightening chip supplies even as demand for consumer electronics continues to grow. https://www.youtube.com/embed/1JkzrR-hznE?wmode=transparent&start=0 The most advanced computer chips are made with a machine manufactured by one Dutch company.
How the AI data center boom redirects capacity
The AI boom has changed memory demand from a broad consumer cycle into a more segmented market centered on high-bandwidth memory chips. In 2023, Micron cut capital spending and the company’s fabs operated below levels needed to justify their cost. By 2026, however, Micron was reporting strong AI demand, record data center DRAM revenue and rapidly rising high-bandwidth memory sales.
This shift matters because the market for supplying memory cannot respond quickly. Opening new fabs requires years of planning, large capital commitments and investments in advanced process equipment and skills. Memory chip manufacturers are likely to remain cautious about expanding capacity even as their profitability improves, with 2026 spending focused more on technology upgrades and high-value products than on large increases in chip supply.
In practical terms, AI is not simply lifting all memory demand equally; it is redirecting scarce capacity toward massive, or hyperscale, data centers and server markets first.
Can consumer electronics catch up?
Consumer electronics can catch up, assuming the manufacturers can weather the cost increases from tariffs and geopolitical pressures. One way they could is by making investments to enable small AI language models to run on consumer devices, a move analysts expect the companies to attempt.
Apple shifted a growing share of U.S.-bound iPhone production out of China to India and moved much of its iPad, Mac, Apple Watch and AirPods assembly for the U.S. market to Vietnam to lower the company’s tariff burden. Yet relocation does not eliminate cost pressure. Manufacturing iPhones in India still costs roughly 5% to 8% more than in China, and in some cases closer to 10%, because supplier ecosystems, logistics and production efficiency remain stronger in China.
Rising geopolitical tensions between the United States and China led to supply constraints and export controls on critical minerals and chip components, raising input costs for consumer electronics manufacturers. This led to higher total import costs and reduced margins for firms unable to pass costs fully to consumers, leading to further consolidation in supply.
Consumer devices do not need to replicate data center infrastructure to offer AI on their products. Their opportunity lies in running small language models on-device for summarization, rewriting, search, assistance and lightweight reasoning. Doing so, however, creates a distinct hardware requirement. Phones and laptops need to incorporate multiple functions on the same chip, combining processing capability with fast local memory and enough storage to keep on-device AI responsive. Apple’s current device requirements for the company’s AI, Apple Intelligence, also show that older phones often lack the compute power and memory needed for useful on-device AI.
To adopt AI, device makers need to redesign their products with higher-end chips – both processors and memory – that can piggyback on the AI model-oriented growth in the chips market driven by the data center boom. Such a shift by the device makers could also provide a useful backstop for the memory chipmakers in case the projected AI and data center growth does not materialize in the medium to long term, a boom-and-bust cycle that memory chipmakers have had to endure many times in the past.
What this means for the wider economy
The AI and data center boom is redistributing capital, supplier attention and pricing power across the broader economy. Sectors with limited purchasing leverage are especially vulnerable when chip supplies tighten. For example, medical technology accounts for less than 1% of the overall chip market, leaving essential equipment manufacturers exposed during shortages.
In contrast, sectors linked to power delivery and digital infrastructure may benefit from the boom because they try to keep up with demand for cloud services and electrification. The International Energy Agency estimates that data centers consumed about 415 TWh of electricity in 2024 and notes that AI is accelerating the deployment of high-performance servers, which implies stronger demand for the grid, storage, cooling and networking equipment around them.
For the consumer electronics industry, the strategic task is not to try to match the AI data centers chip for chip but to build differentiated, energy-efficient, on-device AI services while managing higher supply chain and tariff risks.
And for consumers looking to buy phones, games and laptops, because of high demand from data centers, the next few years are likely to bring higher prices, shortages and delayed product releases.
Vidya Mani, Associate Professor of Business Administration, University of Virginia; Cornell University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Dive into “The Knowledge,” where curiosity meets clarity. This playlist, in collaboration with STMDailyNews.com, is designed for viewers who value historical accuracy and insightful learning. Our short videos, ranging from 30 seconds to a minute and a half, make complex subjects easy to grasp in no time. Covering everything from historical events to contemporary processes and entertainment, “The Knowledge” bridges the past with the present. In a world where information is abundant yet often misused, our series aims to guide you through the noise, preserving vital knowledge and truths that shape our lives today. Perfect for curious minds eager to discover the ‘why’ and ‘how’ of everything around us. Subscribe and join in as we explore the facts that matter. https://stmdailynews.com/the-knowledge/
Forgotten Genius Fridays
Octavia E. Butler: The Black Woman Who Helped Change Science Fiction
Discover how Octavia E. Butler transformed science fiction, explored Black identity, and helped shape Afrofuturism through her groundbreaking novels.
Forgotten Genius Friday | The Knowledge | STM Daily News
Octavia E. Butler: The Woman Who Reimagined the Future
When we think about science fiction, we often picture spaceships, robots, alien civilizations, and futuristic technology. But what happens when science fiction becomes a way to explore racism, inequality, human survival, and the consequences of our choices?
That is exactly what Octavia E. Butler brought to the genre.
Long before Afrofuturism became a widely recognized cultural movement, Butler was creating extraordinary stories that placed Black characters—especially Black women—at the center of imagined futures.
Her work challenged conventional ideas about who could be a hero, whose experiences mattered, and what science fiction could accomplish.
A Young Girl With a Powerful Imagination
Octavia Estelle Butler was born on June 22, 1947, in Pasadena, California.
Raised primarily by her mother and grandmother after her father’s death, Butler grew up shy and found comfort in books and storytelling.
Her mother worked as a domestic employee, and Butler sometimes accompanied her to work. Those experiences exposed her to the racial and economic inequalities that would later influence her fiction.
As a child, Butler loved science fiction, but she noticed something missing: people who looked like her.
Rather than accepting that absence, she began creating stories of her own.
She would eventually become one of the most influential writers in speculative fiction.
Breaking Barriers in Science Fiction
During the 1970s, mainstream American science fiction was largely associated with white male writers and protagonists.
Butler entered that literary world with a different perspective.
Her first published novel, Patternmaster, appeared in 1976. It introduced readers to a world shaped by extraordinary mental abilities, social hierarchies, and struggles for power.
Butler continued developing complex stories that explored humanity’s relationship with authority, identity, biology, and survival.
In 1979, she published one of her best-known novels, Kindred.
The book follows Dana, a Black woman living in 1970s California who is repeatedly transported back to a Maryland plantation before the Civil War.
Through Dana’s experiences, Butler forced readers to confront the brutality of American slavery and its continuing influence on the present.
Rather than treating history as something safely confined to the past, Kindred makes that history immediate and deeply personal.
Imagining the Future—and Warning Us About It
In 1993, Butler published Parable of the Sower, a novel set in a collapsing American society struggling with economic inequality, environmental destruction, violence, and weakened institutions.
Its central character, Lauren Olamina, is a young Black woman who develops a philosophy called Earthseed while searching for a way to survive and build a community.
The novel takes place beginning in 2024, making its imagined future particularly striking to modern readers.
Butler followed it with Parable of the Talents in 1998, continuing her examination of social instability, religious extremism, authoritarianism, and the struggle to create a better future.
Her novels were not literal predictions. They were works of speculative fiction that used recognizable social trends to ask difficult questions about where humanity might be headed.
Octavia Butler and Afrofuturism
Afrofuturism brings together African and African diasporic experiences with science fiction, technology, history, mythology, and imaginative visions of the future.
While artists such as Sun Ra and George Clinton explored cosmic identity through music, performance, and futuristic imagery, Butler used literature to investigate power, history, and humanity’s possible futures.
Her novels frequently placed Black women in situations where they had to navigate extraordinary challenges and reshape the societies around them.
Butler’s work is widely discussed within Afrofuturist scholarship, although her literary contributions also extend beyond any single cultural label.
She demonstrated that Black people did not have to remain secondary characters in someone else’s vision of the future.
They could be the architects of entirely new worlds.
Recognition and a Lasting Legacy
Butler received some of science fiction’s most significant honors, including Hugo and Nebula Awards.
In 1995, she became the first science-fiction writer to receive a MacArthur Fellowship, often called a genius grant.
Her work also included the Xenogenesis trilogy, later collected as Lilith’s Brood, which explored humanity’s encounter with an extraterrestrial species and raised questions about consent, adaptation, identity, and survival.
Butler died on February 24, 2006, at age 58.
Yet her influence has continued to grow.
Her novels are studied in classrooms, discussed by scholars, and embraced by new generations of readers and creators interested in science fiction, social justice, and Afrofuturism.
A Genius Who Made Us Think Differently About Tomorrow
Octavia E. Butler was more than a science-fiction author.
She was a visionary storyteller who understood that imagining the future also meant examining the past and questioning the present.
Her stories asked readers to consider how power operates, how communities survive, and how human beings might change.
And perhaps her greatest contribution was demonstrating that the future belongs in the imagination of everyone.
Why Octavia E. Butler Belongs in Forgotten Genius Friday
At STM Daily News, our Forgotten Genius Friday series celebrates extraordinary individuals whose ideas, innovations, and accomplishments helped shape our world, even if their stories aren’t widely known. Octavia E. Butler fits that mission perfectly. Although she received prestigious literary awards and recognition during her lifetime, her influence extends far beyond science fiction. Like the inventors, scientists, and trailblazers we’ve featured in this series, Butler challenged barriers, defied expectations, and opened doors for future generations. Through her imagination, she helped redefine who could tell stories about humanity’s future—and who could be at the center of those stories. Her inclusion in Forgotten Genius Friday reminds us that genius isn’t limited to laboratories and inventions. Sometimes, it begins with a pen, a powerful imagination, and the courage to envision a different world.
Sources and fact-checking
The Huntington Library holds Butler’s literary archive and confirms the chronology of her major novels, awards, and career. The MacArthur Foundation independently documents her 1995 fellowship.
- Official Octavia E. Butler biography
- The Huntington — Octavia E. Butler Papers
- MacArthur Foundation — Octavia Butler
- The Huntington — Telling My Stories exhibition
For more stories about overlooked innovators, writers, scientists, and visionaries who changed our world, explore The Knowledge and Forgotten Genius Friday at STM Daily News.
Food Truths
Soul Food Has African Roots—and a Distinct Black American History
Soul food connects African heritage with generations of Black American creativity and community. Here’s why shared roots and a distinct cultural identity both deserve recognition.
Last Updated on October 15, 2026 by Daily News Staff
Shared ancestry connects the African diaspora. It also makes understanding each community’s food traditions worth the effort.
A debate over who can claim soul food raises a question larger than any social media argument: When does a shared cultural inheritance become a distinct tradition?
People across Africa and the African diaspora have foods that evoke home, family, comfort, and belonging. Recognizing that connection is valuable. But using “soul food” as a general description of comforting food is different from identifying the cuisine historically known by that name.
Soul food is a distinctly African American culinary tradition with African roots, shaped by generations of Black life in the United States. Recognizing its American development does not erase Africa. Recognizing Africa should not erase what Black Americans created.
African Roots, American Development
Enslaved Africans arrived with agricultural knowledge, cooking skills, and food traditions. They adapted those traditions to unfamiliar surroundings and unequal access to food, drawing on available ingredients and encounters with Indigenous and European foodways.
Okra, black-eyed peas, and vegetable-centered cooking offer important connections to African traditions. Corn and cornmeal reflect Indigenous American agriculture. These ingredients and influences became part of an evolving food culture rather than remaining unchanged copies of dishes from another continent. [1]
The distinction is between ancestry and development. A cuisine can descend from older traditions and acquire its own identity through the experiences of the people who preserve and transform it.
More Than a Story About Scraps
Slavery and deprivation belong in this history. Enslaved people supplemented restricted food supplies through gardening and other means, and used small amounts of meat to season vegetables. But telling the entire story as “making something out of scraps” understates their knowledge and creativity.
Black food history also includes seafood work, farming, skilled cooking, and enterprise. The Smithsonian’s account of Black foodways, for example, documents African Americans’ extensive involvement in harvesting, processing, and selling oysters. [2]
These were people with expertise. Their contributions deserve recognition as culinary work and cultural creation.
Why the Name Matters
The food traditions are older than the widespread use of the name “soul food.” The term became prominent during the 1960s, amid movements asserting Black identity and cultural pride. Smithsonian histories describe the soul food movement as celebrating foods that mainstream America had often disparaged. [3]
That context gives the name meaning beyond a meal that tastes good or brings comfort.
For some families, a pot of greens or a pan of cornbread carries memories of relatives, church dinners, holidays, and recipes learned by watching someone cook. Calling those foods “soul food” places them within a particular cultural story.
Southern Roots Traveled
Soul food also developed beyond the South. During the Great Migration, Black Americans carried Southern food traditions into new cities and neighborhoods, preserving familiar dishes while adapting their cooking. Smithsonian programming connects that movement directly to soul food’s development. [4]
That helps explain how a cuisine rooted in the South became part of Black community life across the country.
It also makes geography an imperfect test of authenticity. Soul food cooked in London can still be African American soul food. A cuisine’s cultural origins do not change simply because someone prepares it elsewhere.
Shared Heritage Does Not Mean Identical Cultures
Africa is a continent of many food traditions. The diaspora is similarly diverse. African American, Afro-Caribbean, Afro-Latin American, and Black British identities encompass different histories and relationships to food.
Someone may use “soul food” figuratively to describe a cherished family dish. That emotional use is understandable. The difficulty arises when it becomes a historical claim that all Black cuisines are versions of the same named tradition.
Shared ingredients and ancestry establish connections; they do not make distinct cuisines interchangeable.
A useful conversation would ask which dishes are related, what techniques survived, and how different communities adapted them. That approach gives people more history to appreciate.
Respect Through Recognition
Defending soul food’s African American identity need not become an attack on Africans, Caribbean people, or Black Britons. Equally, celebrating connections across the diaspora should include respect for Black Americans’ particular contributions.
Anyone can cook, enjoy, study, and share soul food. Cultural recognition does not require closing the kitchen door. It requires crediting the people and history behind the cuisine.
Soul food’s African roots and African American identity belong in the same sentence. Both deserve to be remembered.
What dish connects you most strongly to your family’s history—and who taught you to make it? Share your story in the comments.
Explore more food stories and culinary traditions in STM Daily News’ Food & Drink section.
Sources and Further Reading
- African and Native American Foodways and Resilience: From 1619 to COVID-19 — Research on food traditions, adaptation, and cultural resilience.
- Black Foodways and Cuisine — National Museum of African American History and Culture.
- African American History Highlights — National Museum of American History, including the soul food movement.
- Cooking Up History — National Museum of American History programming on migration and soul food.
The Knowledge
Where Does Federal Money Go? The Biggest Costs Behind the Budget
Where does federal money go? Part two of our National Debt Explained series examines the biggest expenses in the 2025 budget and how spending connects to government borrowing.
Last Updated on October 13, 2026 by Daily News Staff
The Knowledge | National Debt Explained, Part 2
When discussing debt, ask: Who borrowed the money? That question helps distinguish a family’s finances from the federal budget. Our first episode explained why your credit card balance is separate from the national debt. Now comes the next question: What does the federal government spend money on?
Much of it pays for retirement benefits, health coverage, national defense, public services, and interest on previous borrowing.
Social Security was the largest individual program in fiscal year 2025, costing approximately $1.6 trillion. But combine the major health care programs—including Medicare, Medicaid, and health insurance subsidies—and their spending reached about $1.8 trillion, exceeding Social Security alone. cbo.gov
The figures below cover October 1, 2024, through September 30, 2025.Major expense FY 2025 spending What it supports Social Security About $1.6 trillion Retirement, survivor, and disability benefits Medicare, net $988 billion Health coverage for older adults and certain people with disabilities Net interest $970 billion Cost of servicing publicly held federal debt, after subtracting interest income Discretionary defense $893 billion Military personnel, operations, equipment, and research Medicaid $668 billion Federal contribution toward health coverage and care for eligible people
These are selected expenses, not the entire budget. Medicare spending is shown after premiums and other offsetting receipts. The combined health care total already includes Medicare and Medicaid, so it should not be added to those rows. cbo.gov
The government also supports veterans’ health care, transportation, education, housing assistance, courts, law enforcement, scientific research, disaster response, and environmental protection. Nondefense discretionary spending totaled approximately $980 billion in 2025, covering many of these services. Some funding for these areas falls elsewhere in the budget. cbo.gov
Federal spending falls into three broad groups:
- Mandatory spending: Payments governed by existing eligibility rules and benefit formulas, including Social Security and major health programs.
- Discretionary spending: Funding lawmakers control through appropriations legislation, including most defense spending and many public services.
- Net interest: The expense of servicing publicly held federal debt, minus government interest income. cbo.gov
Interest deserves attention because it pays for borrowing already undertaken. In 2025, net interest exceeded discretionary defense spending. Congressional Budget Office
A program’s cost does not automatically translate into an equal increase in national debt. Taxes and other receipts finance much of federal spending. Social Security and Medicare’s hospital insurance program receive dedicated payroll taxes, while Medicare also collects premiums.
In 2025, federal spending totaled approximately $7 trillion, compared with $5.2 trillion in revenue. The roughly $1.8 trillion shortfall was the deficit, requiring borrowing. Understanding national debt therefore means examining both what government spends and what it collects. cbo.gov
Explore more explanations behind the headlines at STM Daily News, home of The Knowledge.
Sources for this episode
- CBO: The Federal Budget in Fiscal Year 2025 — Overview of spending, revenue, deficits, and debt interest.
- CBO: Mandatory Spending in Fiscal Year 2025 — Breakdown of Social Security, Medicare, Medicaid, and other benefit programs.
- CBO: Discretionary Spending in Fiscal Year 2025 — Defense spending and services including transportation, education, and veterans’ health care.
- CBO: Overview of the FY 2025 Budget Infographics — Highlights the largest expenses and broader budget trends.
Related reading
- U.S. Treasury: Understanding the National Debt — What federal debt represents and how borrowing works.
- U.S. Treasury: Understanding the National Deficit — Explains the difference between an annual deficit and accumulated debt.
- U.S. Treasury: Federal Spending — Additional context about where federal money goes.
