Smartphone prices are poised to surge in 2026 because of the AI-driven memory chip shortage

Memory chip shortages caused by AI Tech giants hoarding DRAM for Data centers could add 8 to 10 percent to the costs of your next smartphone.

File Photo: iPhone 17 Pro and 17 Pro Max

Memory to cost double and make smartphones more expensive

Counterpoint Research is claiming that Memory prices are likely to rise by 30 percent this Q4 2025 and possibly make another increase of 20 percent more early next year. This is on top of the current 50 percent price increase experienced this year to date.

The key issue is the tight supply of legacy LPDDR4 because of suppliers like Samsung and Micron shifting output to more advanced chips to service the high-margin AI server demand. This has resulted in the distorted Memory market.

Samsung, the world's top memory producer, has already hiked server chip prices by 30 percent to 60 percent. This move sent ripples into consumer electronics and will translate to Bill-of-Materials (BoM) costs rising by up to 15 percent in mid-to-high-end models, forcing manufacturers to either eat margins or pass the pain to consumers.

Research firm TrendForce is claiming that these memory price hikes will make smartphones 8 to 10 percent more expensive to produce. Some smartphones could cost more as early as next year.

The International Data Corporation (IDC) forecasts global smartphone shipments dipping by 0.9 percent in 2026. This would be the first decline since 2020, despite the 1.5 percent uptick in 2025 caused by Apple's record 247.4 million iPhone shipments. 

IDC continued with the statement that the average selling price (ASP) is tipped to climb to USD 465 from USD 457 this year, which pushes the total market value to a record USD 578.9 billion. IDC expects that low- and mid-range Android devices will feel the sting the most in the short term.

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Source: TrendForce, IDC, Counterpoint Research 1, 2, Via: CNN