AI-induced Memory Shortage Rocks Campus Network Market
Companies mentioned
AI infrastructure spending has tightened DDR4 availability, raising costs for WLAN access points and campus switches and affecting enterprise LAN budgets through 2028.
Market overview
The report links the first-order impact of AI data center investment to component shortages that affect other enterprise IT equipment markets.
It highlights WLAN access points and campus switches as products built with DDR4 components that face supply constraints once memory producers shift capacity toward AI-focused High Bandwidth Memory.
DDR4 shortages and pricing pressure
The analyst states that DDR4 became harder to obtain and therefore more expensive after memory producers shifted focus to AI-related High Bandwidth Memory.
It reports that the spot price of DDR 8 Gbps memory chips grew 788% over the past year and describes this as a signal of contract price pressures for systems vendors.
Impact on WLAN and campus switch bill of materials
The note says memory historically made up a low-to-mid single-digit share of the bill of materials for campus switches and WLAN, but cost escalation can materially raise total equipment cost.
It estimates that if a component representing 5% of equipment cost grows by 8 times, it increases total equipment cost by 30%.
Why vendor redesigns take time
The report says that swapping to a cheaper memory chip can require changes to board layout or power design.
It adds that such changes may trigger firmware changes requiring regression testing and can necessitate new certifications in each market, adding cost and delay before products can be released.
Forecast through 2028
The analyst expects the DDR4 supply-demand balance to remain unfavorable until memory-efficient equipment is released and memory production ramps, which the note says is unlikely before 2028.
By 2Q26, vendors had assured investors sufficient memory supply for the next one or two years, but the report still anticipates pricing pressure and uneven lead times.
Expected dynamics for enterprise LAN
The note projects that switch and AP prices will rise further even if growth slows, with equipment pricing likely to stay elevated due to inflation affecting DDR4 and DDR5.
It also forecasts potential suppression of market demand as enterprises delay upgrades or limit projects to avoid exceeding budgets.
It expects vendor terms to remain tight on returns, order cancellations, and quote price validity, and it says vendors may pursue redesign opportunities during transition points such as Wi-Fi 8 introduction or accelerated end-of-life dates.
It concludes that memory shortages will be one factor in how the LAN equipment market is affected by AI, including increased cyber risks that prompt security audits and patching and renewal, with possible later changes to LAN traffic patterns and network redesigns.
“Memory Shortages Are Expected to Shape the Enterprise LAN Market Until 2028,” the report says.
This Analyst Signals brief reflects a neutral, fact-based summary of the original research note.
Blog post, originally published at delloro.com.