Marketplace - Consumer electronics can't keep up with AI

Episode Date: May 1, 2026

Bad news for your next smartphone purchase: An extended memory chip crunch is upon us, warns Apple CEO Tim Cook. New artificial intelligence projects are outspending the consumer electronics sector on memory, and manufacturers have limited output capacity. Retailers will likely pass those higher costs onto consumers. Also in this episode: A retiree focuses on charitable giving, specialty movie ticket prices climb to $50, and America’s biggest energy port benefits from the Middle East oil tie-up.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

Storms, floods, and fires are ever more extreme. And yet, the Federal Emergency Management Agency is fighting for its life. I've never been a big fan of FEMA. FEMA's a disaster. FEMA's a dirty way. People are waking up in droves to the FEMA camps. Can the agency survive the stories that have been told about it? And can we survive without FEMA?

American Emergency, the Movement to Kill FEMA is a brand new series from WNYC's on the media. Listen, wherever you get your podcasts. All right, new game, kids. What is Kevin Warsh thinking? In five words or less, from American public media. This is Marketplace. In Los Angeles, I'm Kyle Risdahl. It is Friday today.

Somehow it is the first day of May. It is always to have you along, everybody. Look, I could dilly-dally here tell you what a week it has been in this economy. But honestly, why not just get to it? So deep ready is at MS. Now. Courtney Brown is at Axios. Hey, you two. Hi, Kai.

Hey, Kai. All right, let's see. Tossing your coin here. Courtney, you get to go first. We're going to talk Fed meeting for a while and the ancillary happenings. First of all, I suppose we should talk substance. What did you make of what Chair Powell had to say and the state of this economy? So before we heard from Chair Powell, we got the FOMC statement.

And the first thing I saw when I saw it was Holy Cow Fed President revolt. We had Governor Stephen Myron dissent in favor of rate cuts, but he's been doing that for a while. But three Fed presidents dissenting not over interest rates, but language in the statement that maintains an easing bias. Their problem was, we don't think that should be the case anymore. There is a real possibility that the next move could be a rate hike. And so that's the tone that we enter the press conference with. And then the big shocker, of course, was Powell saying that I'm going to stay on as a Fed governor after my term as chair expires. And I want to make sure that essentially he was saying he wants to protect Fed independence.

And he sees that as his role as a public servant. So, I mean, it's going to be a fascinating few months to watch him on the Fed board alongside Kevin Warsh. All right. You just gutted like the whole next like five minutes of this interview. You're killing me, man. I don't even know what you're doing here. You just went straight. Oh, I'm sorry.

Well, it's all right. We're going to unpack it. We're going to unpack it a little bit. Sadipe, I want you to help people understand. So, look, everybody's heard by now that there were three dissents from governors and then and then Miron, from board presidents, rather, and then Miron and the rate cut, which was totally expected. Talk to me about what that says about what Kevin Warsh is going to inherit as he takes over on the 15th of May. the one of the lines from the outgoing chair Powell is that inflation is kind of misbehaving he said

which is an interesting and perhaps polite way to say that all sorts of things are not going our way right now the inflation readings are way off the feds target obviously we're now eight weeks into a war that was supposed to be a few days or a few weeks and has no end in sight and that is the beginning of a problem that lots of people on the Fed, lots of officials have got to be worrying about. If that continues, it can start bleeding into other things in the economy and make inflation misbehave even more. And so Kevin Warsh, who has historically tried to articulate being more hawkish, more concerned about inflation. We'll see if he actually believes that when he's inside the Fed. He now has to come in and deal with this situation that could take quite a while to actually resolve itself.

once he's on board. Keep going, too deep for a second. Quite a while, meaning what, like six months, eight months? I mean,

there is that long and, you know, indeterminate lag with monetary policy and, you know, the whole deal. And, I mean, this really,

he needs a crystal ball to figure out what's going to happen in the Strait of Hormuz and with the war. If this goes on for a couple more months and we're at tank bottoms

with oil supplies all over the world, that is a six-month problem. That's a nine-month problem. That means higher inflation, month after month after month carrying through and preventing the Fed from actually cutting rates the way obviously the president wants, but the way some other people on the FOMC want as well. Right. Courtney, about Powell deciding to stay on. I personally was not surprised. I would like to know,

number one, whether you were surprised. But number two, I take Powell at his word that he's going to be really quiet and not pipe up a whole lot in his chair emeritus role. But I wonder what you make of it? I think that I need to mention that we got the perfect Powell meme in the last, you know, press conference. You know, he was talking about what it means for him to be, you know, he's going to be a quiet governor, he said. And, you know, someone asked him, what does that mean? And he started to shrink lower behind the podium. And I think that means that he's not going to be overly aggressive and trying to cut a against what, you know, Warsh is going to do as chair.

He's not going to be a shadow fed chair. So I think it will be interesting to watch in the months ahead. I think one of the things that I was a little bit unsatisfied by during the press conference is, I'm not sure I understand what the new test is for Powell to feel like he's comfortable stepping down as governor. I'm not sure what that will look like. So I guess we'll have to wait and see. Yeah, so we have to sort of wait and see what the Department of Justice does, what the president does, Franklin, and what the U.S. Attorney for the District of Columbia, Gene Piro does. So deep, you mention this. I do want to, Sudip, I do want to point out inflation, PCE came in 3.2 percent. I mean, that's not nothing, right? It's going exactly the opposite way of what the Fed wants it to do, and that just complicates Warsh's, you know, first short number of months on the board.

It absolutely does. And look, the labor market remains. I think stable was the word that Chair Powell used. Jobless claims have just continued to stay low, dropping even lower in the latest week. It is remarkable how stable the labor market is. It is a low-firing economy. And that means that this is not a wage price spiral. It's not that kind of situation right now.

It is at the moment still a one-time price effect. Oil prices go up. People deal with it. It's not like they keep going. up. Now, obviously, anything can happen, and we're all sitting here wondering how we've gone two months into a war with the Strait of Hormuz closed, and it isn't as bad as it seemed like it would be. But that just creates all sorts of uncertainty for all the other things. It's not just oil. It's all the other things, as you've covered quite extensively on the show, lots of other

product prices that are going to be hit by that, and that creates many, many questions for the inflation outlook. Right, right. Okay, super quick. We're running out of time. Our new game show. What is Kevin Warsh thinking? Five words or less. Courtney Brown, you go first. Literally 10 seconds. Go. Whatever the equivalent of sub-tweeting, but in an FOMC statement is, that's what the Fed presidents did. They were sending a signal, and Erich, Rosengrad, former Boston Fed president said this. This is a signal to Warsh. It's not going to be that easy to come in and cut rates. All right, we'll take it. It's not going to be that easy. Sudip, what do you got? 10 seconds. Oh, boy, this is messy. He's going to come in.

That was very good. That was very good. You were listening at the open. Yeah, that one ready. Yeah, exactly. He's going to see how challenging it is to actually get 19 officials to line up behind him. And he wants a more active discussion around the table. He's certainly going to get it rather than having something he experienced 20 years ago.

It will be a goat rodeo. All right. Sidip Reddy at MS now. Courtney Brown at it. Maxios, thanks you too on a Friday. Thanks, Kai. Wall Street to end the week. Traders were a little betooks in between details, numbers, when we get there. There was the Fed news, the inflation news, all the rest of the news this week that the three

of us were just talking about. Also, though, Big Tech, Apple rounded out earnings week yesterday with shocker, another strong performance, thanks largely to the iPhone 17. Soon to be former CEO, Tim Cook, said demand for them has been extraordinary. That's a quote. He also did say, though, that increasing costs for memory chips could start putting a dent in things. Memory chips, of course, are in all kinds of consumer electronics, but they have been in short supply as chipmakers moved to a high-paying customer. Any guesses? Yes, AI data centers. Marketplaces Megan McCarty Carino has more on that one.

The memory market has always been volatile, says Willie Shee at Harvard Business School. There has been this boom and bus cycle that goes back 30, 40. years. Demand surges when a new tech product gets released. Manufacturers build more capacity, creating a glut, rinse, and repeat. But the AI shock is of a different magnitude. An AI server will typically have maybe 10 times as much memory as a conventional data center server. So the three big memory makers have pulled back on the consumer market. Gamers who build custom PCs felt the pain first, says Ryan Reith at IDC market research. Prices for some DM. DIY memory kits were tripling late last year.

Think about that as the precursor to what's going to happen for the mass market. Big brands like Apple locked in memory supplies before the worst of the surge, but will be renegotiating contracts at higher prices this year. A lot of that cost is going to get passed through to the consumer, and it's only going to intensify as we get into the second half of this year. IDC predicts the global device market will shrink significantly until memory supplies start to rebound next year. But Apple could still emerge a winner, says analyst Neil Seibart at above Avalon. Because of the strongest player, they have the strongest portfolio.

They are putting orders out there that are significant. Without that bargaining power, he says smaller players will likely pay even higher prices for memory if they can get any at all. I'm Megan McCarty Carrino for Marketplace. According to the U.S. Energy Information Administration, the United States is the world's biggest exporter of liquefied natural gas. And an increasing share of those exports is being sent through the sleepy beach city of Corpus Christi, Texas. So with the Strait of Hormuz still closed and the world's scrambling for LNG, Marketplace's Elizabeth Troval took a little road trip. All day here on the Corpus Christi Bay, ships carrying crude oil and fuel make their way through this deep water ship channel,

as do dolphins. When the ships leave, they'll actually get in front of the ship and ride the bow wave out, and sometimes they'll spin, sometimes they'll jump. I'm looking at the turquoise water with Kent Britton, CEO of the Port of Corpus Christi, which ships out roughly half of U.S. crude oil exports. So about two and a half million barrels a day. This channel connects the engine of the U.S. oil and gas industry, the Permian Basin, to the global energy marketplace. And business is booming.

March was the busiest month in the history of the Port of Corpus Christi, and by all accounts, April is actually going to be even busier than March. So our customers here have, let's call it, overproduced to fill a gap, obviously, for what's not being allowed to flow through the straight of Formos. Crude oil exports can only grow so much, but liquefied natural gas is another story. LNG shipments this year are actually up about 40% over the same period last year. That new LNG coming online was planned long before the war in Iran started. But the timing is right, with nearly 20% of...

global LNG disrupted. For oil and gas, LNG is the growth story of the next decade. Britain says all of the energy export growth has brought billions in investment to the region and tens of thousands of jobs. Further inland, metal pipes shut into the air and refineries stretch across a vast industrial area. I walk into the barbecue man restaurant run by at DeShields. This is our food line here. we got brisket, sausage, ham, turkey, beef, dino ribs.

He's the third generation owner of the restaurant. 90% of our customer base is going to be the industrial workers here in Corpus Christi. Our main business is lunchtime, which again, that's all the contractors and refinery workers that are in the area. And without them, we wouldn't really have a business at all over here. Those workers can make up to six figures, so they have money to spend, DeShield says, whether it's buying barbecue, beer, or a home. What spurred this business back in the 70s was the oil boom in the area. And we've kind of rocked and rolled with the industry through the ups and downs.

That was back during the energy crisis of the 1970s, when offshore drilling in the region was ramping up. That crisis also caused the U.S. to ban oil exports for four decades, says Bob Paulison with the coastal. Bend Industry Association. And that ban continued until 2015. When it was reversed by Congress under President Obama, this was as fracking revived the Permian Basin as a top oil-producing region in the world. This turned Corpus Christi into an energy export juggernaut. One of the first tankers to carry oil for export for international markets came out of

Corpus Christi at the end of 2015. Now, the industry accounts for roughly 40% of local economic output, says economist Denise Gerreg with Texas HANM Corpus Christi. And that economic impact continues to grow with the expansion of LNG exports. Although the workforce is not huge in numbers, every dollar of LNG output generates more than 70 cents in our local economy. Whether Corpus Christi grows beyond the planned LNG expansion is still TBD. Locally, the city is grappling with historic drought.

And the future of global energy markets is uncertain. But as crude oil tankers go unfilled in the Middle East, it's never been busier here on the Corpus Christi Bay. I'm Elizabeth Troval for Marketplace. Coming up. I can't be sure. sure that I won't regret it. But I can't be sure of a lot of things. Words to live by, huh? First, though, let's do the numbers. Dow Industrial's down 152 on the day, 3 tenths percent, finished of 49, 49, 99 did the blue chips. And as that gained 222 points, 9 tenths percent, 25,100, 14. The S&P 500 up

21, 3 tenths percent, 7-230 there. For the five days gone by, Dow up about a half a half a half a half percent, the NASDAQ picked up 1.1 percent. The S&P 500 improved nine-tenths of one percent. Spirit Airlines is preparing to shut down after it couldn't secure a deal from bailout from the Trump administration, although the president said today he hasn't decided yet. Spirit Aviation holdings plummeted 25 and 3 tenths percent. Elizabeth was talking about Corpus Christi and LNG. Texas space Schneer Energy, the biggest exporter thereof, Schneer Energy down 1.75%. You're listening to Marketplace. Storms, floods, and fires are ever more extreme. And yet, the Federal Emergency Management Agency is fighting for its life.

I've never been a big fan of FEMA. FEMA's a disaster. FEMA's a dirty way. People are waking up in droves to the FEMA camps. Can the agency survive the stories that have been told about it? And can we survive without FEMA? American Emergency, the Movement to Kill FEMA is a brand new series from WNYCs on the media. Listen, wherever you get your podcast.

This is Marketplace. I'm Kai Rizdahl. The Devil Wares Prada two hits theaters today if somehow you've missed all of the ads. For that movie, most tickets will set you back 15-ish bucks or so, but I did see a distressing headline in the Wall Street Journal the other day. The $50 movie ticket has arrived, it said. Ben Fritz had the story. Ben is good to talk to you again. Thanks for having me, Kai. I'll be honest with you. I saw $50 tickets in the headline, and it's stopped me in my tracks in mid-scroll as it were what the heck yeah i was stunned too that's why i wrote the story um it turns out that uh people who go to the movies are a little bit like people who fly in airplanes you know it's this the same basic experience but some people are willing to pay more for something extra and what regal who's the company charging 50 dollars what they figured out

is there are people who want to see this movie dune part three on opening night in the absolute best format, IMAX 70 millimeter film, and for that experience, they're willing to pay a lot more than most people are expected to pay for most movies. And they charge $50,

and they sold those tickets really fast. Amazing. So we should point out here, as you and I talked about last time we had you on, this is the premium experience. It's the IMAXs, it's the big deals,

and that's what the companies are going for. It has to be said that there are executives saying, look, we've got to make movies affordable again, man. $50 is a lot. Right. So some people in Hollywood think this is a really bad strategy because the more that we're charging people as if going to the movies is a special occasion, the more people are going to view going to the movies as a special occasion and they're only going to go a few times a year as opposed to in the past, you know, people, it was a cheap date.

Yeah. Yeah. How much of this is being driven by the fact that we are make, we collectively, this economy, are making far fewer movies than we did, say, before the pandemic, right? That's part of the deal. Yes. So where the studios are making fewer movies and fewer of us are going to the theaters. The number of movies made is down about 25% from before the pandemic and attendance of theaters is down about 30%. So it's kind of creating this negative cycle where, well, people go to the movies less because there are fewer movies and because people are going less, the studios are making fewer movies. And then because all that's happening, the theaters are raising their prices because they've got to make more money from fewer people. So it's this downward spiral. Right. And there's a concessions thing, too. Like, we used to spend five bucks pre-pendemic, and now we're spending nine bucks every time we go. Yeah, actually, so as much as people get freaked out about the prices of movie tickets is actually the popcorn and soda's prices that have really gone up the most. And people are both spending more per bucket of popcorn and they're buying more stuff when they go. And I think that's also part of this film is special occasion trend where, hey, if I'm only going once or twice or three times a year, fine, I'll spend extra to get like the biggest popcorn and to have nachos. with it or whatever, whereas if I was going every week or two, I probably wouldn't spend that. Yeah, that's fair. And I get that, you know, a special occasion and all that stuff. But I could just sit on my couch, man, and watch it from my Netflix subscription. Right. That's the danger of all of this. Yes, absolutely.

Right. All right. So put up or shut up. Are you going to spend 50 bucks on a movie ticket? No way. I can wait. I can wait. I mean, I'm excited to see Dune Part 3. I'd be happy to wait a few days and see it. I'll see it on a weekday. Ben, Fritz. He's at the Wall Street Journal. Ben, thanks a bunch. I appreciate your time. Sure, it's my pleasure. How much any one person is going to need in retirement depends on a whole lot of things. Northwestern Mutual did a survey not too long ago. The best guess among U.S. adults for them to be able to retire comfortably? $1.46 million, they said, that's the average.

It is worth pointing out here that that's 15% more than people were saying, just a year earlier. It also might be worth asking, though, how much you don't need. Here's today's installment of our series, My Economy. My name is Lois Moore. I live in South Bloomfield, Ohio, and I am retired from a career of finance. In my retirement, I decided that I didn't want to keep accumulating. I wanted to begin to be generous with money, which was not my pattern through my life. And so I decided that the right way for me to do that was to put a cap on my net worth. The idea of setting the net worth limit came kind of gradually. In 2017, my mother died, and my brothers and I inherited her estate.

Mom was very private about her money. None of us had any idea what she had, and it was more than we expected. So then when the market started dumping money on me, I started to feel as though this is ridiculous. I have more money than I need. I have more money than I'm going to use. And I would look at billionaires and think, it's not right to have more than you can use. and then I started to think, well, I also, I'm not in that class, but I have more than I can use. And what I need to do is set a limit on it.

That was when I began to give larger gifts. I'm a little embarrassed to tell the number because I feel like it's still too high. And I did choose it kind of arbitrarily. And what I'm thinking is that as time goes on, probably I'm going to continue to adjust the limit and adjust it downward. but it just seems like a number that will take care of me at the end of my life and will take care of emergencies between here and there. It is a little scary to begin to spend because over my working life, the idea was to accumulate.

I was putting money away for college. I was putting money away for retirement. And to take a chunk and give it to a charity instead of giving them a few hundred dollars to give a serious gift to a charity was a little frightening. When I've shared that I'm doing, doing this, which to be honest, I have not a whole lot because I kind of feel like it makes me sound like I'm such a good person, which is not what I'm trying to say. But when I have shared it with people, they wonder how I can be sure that I won't regret it. And I can't be sure that I won't

regret it. But I can't be sure of a lot of things. The market we always hear is driven by fear and by greed. And I don't want those to be my drivers. I want my norm to be contentment. And I'm not there, but that's my goal. And this is my tool. Lois Moore. She's in South Bloomfield, Ohio. Money, it turns out, actually isn't everything, huh? Whether you are saving or spending, we cannot do this series without you. So take a second, if you can, let us know what's going on. Marketplace.org slash my con. This final note on the way out today, which I will preface by saying we don't do a lot of thoroughbred horse racing on this program. But we are making an exception today.

The Kentucky Derby, as you might have heard, is tomorrow 20 horses in the field, including, I love this. Wait for it. Wait for it. A colt named Emerging Market. Two career races so far. Two wins, 15 to one odds, as I speak. Our theme music was composed by BJ Leaderman, Marketplace's executive producer, is Nancy Vargali. Joanne Griffith is the chief content officer.

Neil Scarborough is the vice president and the general manager. I'm Kyle Rizdahl. Have yourselves a great weekend, everybody. We'll see you back here on Monday. All right? This is 8 p.m. So many people right now are chasing fast money, not just to feel secure, but to reinvent themselves. And sometimes that reinvention starts to take a life of its own. I'm Rima Grays, and this week on my podcast, this is uncomfortable. I talk with Patrick Radden Keefe about his new book, London Falling, the story of a teenage boy who became obsessed with wealth

and what his family uncovered after his untimely death. Unbeknownst to them, their teenage son had been moving around London with an alter ego. He'd had a secret life, and he had been pretending that he was not their son, but in fact the billionaire son of a Russian oligarchy. Be sure to listen to This is Uncomfortable wherever you get your podcasts.