Podcast Episode
According to TrendForce's February 2026 forecast, global smartphone production could fall between ten and fifteen percent this year, with output dropping to approximately 1.135 billion units. The culprit is clear: memory components that once represented ten to fifteen percent of a phone's manufacturing cost now account for thirty to forty percent.
Counterpoint Research forecasts global smartphone shipments will decline 2.1 percent, with average selling prices jumping 6.9 percent year-on-year. Budget devices priced under two hundred dollars are being hit hardest, with manufacturing costs surging twenty to thirty percent since early 2025.
Apple and Samsung remain better positioned thanks to their scale, cash reserves, and long-term supply agreements that allow them to secure memory twelve to twenty-four months in advance. Analysts predict the shortage could consolidate their market dominance further.
Qualcomm CEO Cristiano Amon has warned that memory will define the size of the mobile market this fiscal year, with analysts at Morningstar and J.P. Morgan expecting supply constraints to persist well into 2027.
AI's Appetite for Memory Chips Is Making Your Next Phone More Expensive
February 15, 2026
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A global memory chip shortage driven by insatiable AI data centre demand is pushing smartphone prices up nearly seven percent in 2026. TrendForce forecasts global smartphone production could fall up to fifteen percent, with budget and mid-range devices hit hardest as memory costs consume up to forty percent of manufacturing bills.
The Memory Crisis Hitting Your Pocket
The next smartphone you buy is almost certainly going to cost more, and you can thank artificial intelligence for the price hike. A global memory chip shortage, driven by the explosive growth of AI data centres, is squeezing smartphone manufacturers worldwide and forcing them to raise prices, cut production, and even downgrade device specifications.According to TrendForce's February 2026 forecast, global smartphone production could fall between ten and fifteen percent this year, with output dropping to approximately 1.135 billion units. The culprit is clear: memory components that once represented ten to fifteen percent of a phone's manufacturing cost now account for thirty to forty percent.
Why AI Is Starving Your Phone of Chips
The root cause lies in a dramatic reallocation of global chip manufacturing. Up to seventy percent of all memory produced worldwide in 2026 will be consumed by data centres powering AI systems. Companies like SK Hynix have confirmed their entire DRAM, NAND, and high-bandwidth memory capacity is sold out through 2026, with Nvidia and other AI firms claiming the lion's share.Counterpoint Research forecasts global smartphone shipments will decline 2.1 percent, with average selling prices jumping 6.9 percent year-on-year. Budget devices priced under two hundred dollars are being hit hardest, with manufacturing costs surging twenty to thirty percent since early 2025.
Who Wins, Who Loses
Chinese brands are bearing the brunt of the disruption. Xiaomi and Oppo have reportedly slashed their 2026 projections by more than twenty percent, while Vivo has cut forecasts by nearly fifteen percent. In India, brands are planning additional price increases through the festive season.Apple and Samsung remain better positioned thanks to their scale, cash reserves, and long-term supply agreements that allow them to secure memory twelve to twenty-four months in advance. Analysts predict the shortage could consolidate their market dominance further.
Qualcomm CEO Cristiano Amon has warned that memory will define the size of the mobile market this fiscal year, with analysts at Morningstar and J.P. Morgan expecting supply constraints to persist well into 2027.
Published February 15, 2026 at 5:23pm
