Broadband rollouts feel the burn from AI memory frenzy
The Register
February 13, 2026
AI-Generated Deep Dive Summary
The rapid adoption of AI is creating a significant challenge for broadband deployment as memory prices surge, impacting telecom companies and raising concerns about the future of connectivity infrastructure. The article highlights that memory costs for routers and set-top boxes have increased nearly sevenfold due to rising demand for AI technologies, which are prioritizing higher-margin applications over consumer hardware. This shift has left telcos struggling with higher production costs and potential delays in their rollout plans.
According to Counterpoint Research, the cost of memory used in broadband equipment has skyrocketed by more than 600% over the past year. While smartphones and PCs have seen notable price increases, the impact on consumer-grade broadband hardware—such as routers and TV boxes—has been even more severe, with prices jumping nearly sevenfold. This surge is particularly challenging for telecoms, as memory now accounts for a significant portion of manufacturing costs, especially in low to mid-range models. Routers, which are crucial for connecting homes to the internet, have been hit hardest due to their reliance on memory and limited supply chain negotiating power.
The article also points out that telcos themselves have contributed to the problem by incorporating AI-like features into home gateways, which require more advanced memory. This shift has positioned them in direct competition with hyperscale datacenters for critical components, where they often lose out due to pricing dynamics favoring AI applications. As a result, telecoms face not only higher costs but also potential delays in deploying broadband infrastructure, with tight memory supply expected to persist through mid-2026.
The broader implications of this trend are significant. For consumers, the rising costs could translate into pricier routers or slower upgrades to newer connectivity technologies. Meanwhile, for the tech industry, this shift underscores how AI is reshaping semiconductor economics, making even the most mundane aspects of internet infrastructure more expensive than anticipated. While AI is often touted as the future of computing, its current impact on memory supply chains serves as a cautionary tale
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Originally published on The Register on 2/13/2026