In the evolving tech landscape, three words are seemingly dominating the news cycle: AI Data Centers.
No matter what type of news you get, you can hardly get away from it. It feels like one is either being built in your backyard or that the apocalypse is coming at any given moment. All of that can be stressful, and I’m sorry to do this, but I’m about to add a bit more onto your plate that we could see coming to fruition as a direct result of data center construction.
Your next car could cost exponentially more than your last one because of one little thing — DRAM, which stands for dynamic random access memory. Essentially, DRAM holds whatever data a processor is currently using, and if your car was made in the last five years, it has more DRAM in its electronics systems than its previous generation.
Manufacturers rely on DRAM more than ever
Data says that cars have never been so tech-savvy
With the recent rise in data center construction, manufacturers like Samsung have begun to shift their DRAM production toward data centers rather than the automotive sector. As vehicles become more software-defined, meaning that they rely heavily on computing power and electronics to deliver features to drivers, the need for more DRAM keeps going up, while supplies become more scarce.
According to S&P Global, the entire automotive space will be increasingly reliant on semiconductors in the long term, rather than worrying about their procurement in the first place. Why is that? According to their data set, the automotive chip market, valued at $90 billion in 2025, is on track to eclipse $139 billion by 2031, far outpacing vehicle production growth. One such manufacturer is Samsung, which is openly shifting its focus to supply needs for data center production. Plainly put, your car has more semiconductors inside it than it did just a few years ago, and that trend isn’t going away anytime soon.
The silicon race is a real one
And there are more competitors than you may know
The chances are you’ve already heard of Silicon Valley, and it gets its name for a reason, but one of the biggest pushes across industries at the moment is to spread silicon throughout the manufacturing landscape. With AI continuing to draw in investor after investor, the need for the heavy computing power that facilities like data centers require is placing tighter constraints on traditional supply chains. At the same time, auto manufacturers need more semiconductors than ever to support their increasingly software-reliant cars. See where this is headed?
With every industry wanting to capitalize on the AI boom, auto manufacturers are left with a legacy relationship with semiconductor producers that may simply not be as profitable as it once was, as legacy manufacturers shift priorities toward more profitable forms of memory rather than the DRAM intended for automotive use. Data centers require more production of a more profitable product. The math is concerning, to say the least. What’s more, EVs require twice as many semiconductors as their ICE counterparts, which is part of why several companies are scaling back EV production in the first place, especially in the U.S.
How does that make your car more expensive
Supply chains directly impact end costs
So, we’ve got an automotive manufacturing landscape that is increasingly reliant on automotive-grade semiconductor production, and a silicon manufacturing landscape that is increasingly favoring other ventures over DRAM production for automotive use. What does that spell out, you might ask? That answer actually gets pretty easy. Auto manufacturers have a choice: either produce less complex, software-reliant vehicles or charge end consumers more for the final product. Maybe then it isn’t so much a choice as an expectation.
Manufacturers will need to pony up more money to maintain a reliable stockpile of semiconductors due to supply chain issues, and as a result, those higher costs will likely be passed on to the end user, or, in this case, drivers.
The car-buying experience could shift as a result
An alarming sentiment is brewing for car dealers
The car-buying experience has remained relatively unchanged for quite some time, and that’s because of a group that calls itself the National Automobile Dealers Association, which lobbies to protect car dealerships in the legal arena. Back when all your favorite legacy manufacturers were just getting started, they didn’t have the cash on hand to sell directly to consumers, so they employed a network of dealerships, and the modern car-buying experience was born.
Fast-forward to now, and that traditional dealership model is under attack not just from upstart EV companies that are opting to sell directly to consumers, but also by rising manufacturer costs and their own dealership add-ons to MSRP. Yes, the consumers will suffer as a result of this shift in semiconductor manufacturing, but they’ll still have to buy cars. What’s just as likely, though, is that some manufacturers may opt to cut out the go-between to get ahead of the competition if trends continue.
