Over recent years, the demand for artificial intelligence has skyrocketed – impacting everything from text and image generation to agentic forecasting. However, over the past few months, the surge in popularity for AI has begun to reshape an unlikely corner of the retail market.
As technology companies race to build AI data centres, the industry has found that the memory chips needed to power them are becoming increasingly scarce, driving up the cost of everything from laptops to tablets.
However, this challenge for tech manufacturers has presented an opportunity for the second-hand markets, and is already changing how consumers shop, with refurbished technology retailers reporting a rise in demand as buyers look for alternatives to increasingly expensive new devices.
Back Market, one of Europe’s largest refurbished electronics marketplaces, says the shift is already well under way. Following Apple’s latest UK price increases, sales of refurbished MacBooks on its platform jumped 43 per cent week on week, while refurbished iPad sales rose 36 per cent.
For Back Market UK general manager Katy Medlock the changes go beyond consumers simply looking for a bargain.
“Every device now is competing with AI data centres for the use of chips,” she says. “As the price of new devices is going up, we’re seeing more consumers getting smarter about these price rises.
“Instead of just buying a brand-new product, they can buy a better-quality device that matches more of their needs when they’re buying refurbished.”
While memory chip shortages may be ramping up the trend, the move towards refurbished tech already reflects a broader change already taking place in the UK.
Data from Back Market’s latest Downgrade Now report found refurbished purchases grew by 37 per cent across the UK during 2025, while 40 per cent of buyers were purchasing a refurbished device for the first time.
And, despite London’s reputation as the country’s technology hub, 85 per cent of refurbished device sales took place outside the capital, suggesting demand has become a nationwide trend rather than a niche market.
Why AI is driving up prices of new tech?
Much of the conversation around AI has focused on Nvidia’s powerful graphics processors consultancy firm Newton board member capabilities and AI Ben Grinell believes the bigger story is hidden inside them.
“It’s memory rather than processing chips that’s the problem, and I think a lot of people are confused by that,” he says.
The world’s three dominant memory manufacturers have increasingly redirected production towards high-bandwidth memory (HBM), the specialist chips used inside AI servers. For chipmakers, the economics are straightforward.
“The margins are about 30 per cent on AI memory, rather than commoditised memory where the margins are probably 10%,” Grinnell says. “You’ve got a choice: I can sell to AI data centres or I can sell to retail. Then you’re going to go with the bigger profit.”
Unlike many supply chain disruptions, there is no quick fix. Building a new semiconductor fabrication plant costs billions and can take three or four years before it begins producing chips. Even then, manufacturers need years to improve yields to the standard expected by companies such as Apple.
The effect is already feeding through to prices. Grinnell estimates the cost of DRAM memory has risen by around 90 per cent in the past seven to eight months, compared with inflation of roughly 4 per cent.
“I think if I look at the price of DRAM, it’s probably gone up about 90 per cent in the last seven or eight months,” he says. “Inflation’s really a minimal part of that.”
Technology manufacturers have begun acknowledging the pressure. Apple recently increased prices on several products, including the entry-level MacBook, while Microsoft’s Xbox price rises earlier this year reflected similar cost pressures across consumer electronics. Analysts have also pointed to rising memory prices as a growing challenge for device manufacturers.
Grinnell argues the pressure is unlikely to ease soon.
“Some people are saying it’s a crunch until mid-2027. I think that’s a bit naive,” he says. “The demand for data centres is going to go up and up.”
The market is also highly concentrated. Three established manufacturers dominate global memory production, making it difficult for retailers and smaller technology companies to negotiate favourable supply agreements.
“The people who are committing to long-term deals with high volumes over several years are getting the supply,” Grinnell says. “The smaller players are missing out.”
Far from representing a broken supply chain, he argues the system is operating exactly as expected.
“It’s not a supply chain issue. The supply chain is absolutely working perfectly. It’s just all being diverted to a higher-profit centre.”
A new life for refurbished technology?
As prices rise, retailers are increasingly looking to trade-ins and refurbished devices to fill the gap.
Grinnell believes stronger trade-in offers will become more common as retailers compete to secure stock.
“I think the trade-in deals will get better,” he says. “The retailers that establish a really good trade-in deal are going to fare better because they’re going to have more stock available for their customers.”
Back Market says shoppers are already changing how they think about upgrades.
“The question consumers are asking isn’t just, ‘Can I afford to buy new?’” says Medlock. “‘Can I get a better device for the money I would have spent buying new?’”
That shift is helping refurbished move beyond its traditional audience of bargain hunters and environmentally conscious consumers.
Back Market’s research found that 84 per cent of UK consumers now understand what refurbished technology is, although many still confuse it with buying second-hand directly from another consumer. The distinction has become central to the company’s latest advertising campaign, which focuses on trust rather than price.
“We’ve really wrapped that layer of trust around it,” Medlock says. “People don’t always understand the difference between second-hand and refurbished, but the difference is huge.”
Unlike peer-to-peer marketplaces, refurbished devices are professionally tested, repaired where necessary, data-wiped and sold with warranties and return policies.
The customer base is changing too. Families buying devices for children, businesses looking to meet sustainability targets and consumers building what Medlock describes as “full Apple ecosystems” through refurbished purchases are becoming increasingly common
Smartphones remain the biggest category, but demand for MacBooks, iPads and premium Apple products continues to grow.
There are limits to how far the refurbished market can expand. Unlike new devices, the supply of refurbished products depends on consumers trading in old technology.
Medlock acknowledges that challenge but believes there is still considerable room for growth.
“The average Brit has about £4000 worth of devices stashed away in drawers,” she says. “What we really need people to be doing is trading those devices in.”
Grinnell agrees refurbished devices will become more important but warns they are unlikely to solve the industry’s wider memory shortage.
“I think we’re going to see a lot more refurbished phones,” he says. “But that market’s not going to solve the problem because that market’s quite small. Once you’ve got that market going, it saturates.”
Instead, he expects consumers to keep devices for longer, become comfortable being “a model behind” and think more carefully before upgrading.
For retailers, that means trade-in programmes and refurbished ranges are likely to become increasingly valuable as consumers adjust to a market where new technology is no longer getting cheaper.
The AI boom may be fuelling the world’s data centres and causing shortages of brand-new tech, but by doing so, giving a second life to millions of devices that might once have been left forgotten in a drawer.
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