The rapid expansion of artificial intelligence infrastructure is beginning to reshape the global electronics supply chain, raising concerns about the long-term viability of some consumer device manufacturers. The chief executive of Phison Electronics has warned that intensifying competition for memory components could force weaker companies to exit certain product lines or leave the market entirely by the end of the decade.

At the center of the issue is a structural shift in how memory is being allocated. AI systems, particularly those supporting large-scale data processing and machine learning, require significantly more storage and high-performance memory than traditional consumer electronics. This surge in demand is influencing how semiconductor producers prioritize customers, with enterprise and AI-related applications increasingly taking precedence.

Phison CEO Pua Khein-Seng indicated that the imbalance could have serious consequences for manufacturers that rely on steady access to affordable memory. Consumer electronics companies typically operate on thinner margins compared with enterprise technology providers, leaving them more vulnerable when component costs rise or supplies tighten.

The shift reflects a broader transformation underway across the semiconductor industry. Memory producers have been aligning production strategies with anticipated long-term demand from AI-related sectors, including cloud computing and data center infrastructure. As a result, traditional consumer segments such as personal computers, smartphones, and other electronics may face greater supply constraints, particularly during periods of elevated demand.

This does not necessarily mean an immediate collapse across the sector, but it does point to an accelerating divergence between high-growth AI markets and slower-growing consumer electronics segments. Larger firms with stronger supplier relationships and diversified operations are generally better positioned to adapt. Smaller or less established manufacturers, however, may struggle to secure reliable component supply or maintain competitive pricing.

The warning also highlights how technological transitions can ripple through entire industries. Artificial intelligence has quickly become one of the most influential drivers of semiconductor demand, altering investment priorities and reshaping the competitive landscape. Memory, once viewed as a cyclical component tied closely to consumer product cycles, is increasingly linked to long-term infrastructure deployment.

For consumers, the effects may emerge gradually, potentially influencing product availability, pricing, and the range of devices offered. For the industry, the adjustment period could result in consolidation, with fewer players competing in certain segments as companies adapt to the evolving supply environment.

While the full impact will depend on future investment, production capacity, and market demand, the shift underscores a fundamental reality: the rise of artificial intelligence is not only creating new opportunities, but also redefining the balance of power across the global technology ecosystem.