JSE-listed MTN says it hasn’t seen the effects of a shortage of computing components due to the rapid growth of the artificial intelligence (AI) industry’s demand for chipsets – yet.
AI companies’ ramp-up of data centres to cater for the demand in use of the technology is pushing prices of PC components up as a global shortage hits the globe, with RAM costs, as an example, surging as much as 250% in recent months.
Speaking yesterday during an investor call on the back of MTN’s annual results for the year to end-December, CTO Amith Maharaj said Africa’s largest mobile network operator has not seen “a drastic shortage”.
However, MTN is seeing the prices of computing parts going up significantly, largely because manufacturers prefer making AI chips as they are more profitable, said Maharaj. The company orders lead items in advance, which includes servers that take between six and eight weeks to arrive.
“Delivery is not an issue. It's just the price has gone up,” added Maharaj.
As a result, MTN is prioritising capex and allocating money to key items, the CTO said.
CEO Ralph Mupita noted that SIM card prices have also gone up. “In the near-term, we're saying, let's make the choices within an envelope. There's an envelope of affordability, and we are asking our teams to make choices within that and prioritise. So, it's something that we are looking at now.”
Mupita added that this situation is affecting companies worldwide. “It's not specific to MTN. It's a global issue now.”
Booming sector
Investment in AI-focused data centres is expected to reach at least $3 trillion globally over the next five years, Moody’s 2026 Data Centre Outlook Report says. The ratings agency explains that this level of investment is required to keep pace with AI capacity growth driven by hyperscaler investment.
South African data centre providers earlier this month warned that cloud computing and web hosting costs in the country are set to rise as infrastructure expenses increase on the back of AI growth, with experts noting these costs would be passed on to end-users.
That level of investment is already straining the global semiconductor supply chain, says IDC.
Early warning
IDC, in a note published in December, cautioned that “the global semiconductor ecosystem is experiencing an unprecedented memory chip shortage with knock-on effects for the device manufacturers and end-users that could persist well into 2027”.
The research company, in a blog, said this was not just a cyclical shortage driven by a mismatch in supply and demand, “but a potentially permanent, strategic reallocation of the world’s silicon wafer capacity”.
IDC also warned: “The global smartphone market, particularly Android manufacturers, is facing a threat in 2026. The industry’s decade-long trend of democratising specs by bringing flagship features to affordable smartphones is reversing.”
Smartphone impact
The cost structure of a smartphone is heavily dependent on the memory used, IDC said. For a mid-range device, memory can represent 15% to 20% of the total bill of materials, while for a high-end flagship device, it is around 10% to 15%.
“As memory prices continue to surge, original equipment manufacturers will likely have to raise prices significantly, cut specifications, or both,” it notes.
Mattheus de Klerk, store manager for @iT computer store at the Stoneridge Centre, already warned in January that the shortage of components and resultant increase in prices would affect more than just the PC industry. He pointed to the example of RAM prices shooting up 250%.
“We’re already seeing delays and pricing pressure on graphics cards. It’s reasonable to expect similar issues in the console gaming space, including potential delays for new models. We also haven’t yet fully seen the impact on smartphones, wearables, or even vehicles. This shortage will ripple across many industries,” says De Klerk.
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