2026 was a cold shower. I see a “perfect storm” forming in the market: two essential elements of production – electricity and raw materials – are becoming drastically more expensive at the same time. This will be directly reflected in the labels of the final products.
Energy demand and production costs are rising
Modern semiconductor manufacturing is one of the most energy-intensive industrial processes in the world. The latest generation of chip factories (so-called “fabs”) consume as much electricity as a medium-sized city. Due to the transformation of global energy grids and the increasing demand for artificial intelligence data centers, the price of industrial electricity in the main production regions (Taiwan, the US, South Korea) has jumped by an average of 15-20% this year.
Since chip production is a continuous process, any increase in the price of energy and raw materials is immediately reflected in the cost of the product.
Raw material shortages: from copper to silicon
Electronics cannot exist without key materials, whose supply chains are currently stretched to the limit:
Copper: Used everywhere from motherboards to power cables. Its price on stock exchanges has reached record highs due to growing demand for electric cars and renewable energy.
Rare earth metals: Essential for the production of displays, magnets and processors. Geopolitical tensions and mining quotas have led to an increase in their prices by about 25%.
Specialized quartz and neon: These materials, used in laser lithography, have also become more expensive due to logistical disruptions.
Forecasted price increases: figures in percentages
According to market analysts, consumers should prepare for the following price changes this year:
Smartphones and laptops: Expected price increases of 10-15%. Manufacturers are trying to amortize costs by reducing configurations, but the base price is still rising.
Graphics cards (GPU) and processors (CPU): this is the most sensitive segment, with a forecasted price increase of 20-25%. Both raw material prices and the huge demand for artificial intelligence are at risk here.
Consumer electronics (TVs, smart homes): the smallest but noticeable price increase – 8-12%.
Server equipment and industrial electronics: the forecasts are the bleakest here – prices could rise by as much as 30% or more, as this equipment requires the most expensive and energy-intensive components.
How will SMCI’s share price react to this? Where can it stop at $80?