RAM shortage driven by AI boom could spike smartphone prices 40% while slashing memory in 2026

Global RAM Shortage Will Raise Smartphone Prices in 2026, Analysts Say -- But How Much?

Expertise Smartphones | Gaming | Telecom industry | Mobile semiconductors | Mobile gaming The insatiable demand for more generative AI is spiking prices in computer parts, which could roll into pricier smartphones next year. Years of cryptocurrency mining have elevated the prices of computer parts such as graphics cards. So it's not surprising to see this trend continue with the rise of generative AI and its unrelenting need for more computing power. What the consumer tech world didn't expect was an increase in demand for memory, which has led to a tight market in consumer RAM for PCs in recent months. That ripple effect has extended beyond computing to impact the smartphone industry as well. Rather than the memory sticks that slot into PC motherboards, smartphones use specialized RAM that's miniaturized to fit in handsets. However, with memory production shifting to meet the demand for massive orders from data centers that handle AI workloads, the gen AI rush is driving up prices for all types of RAM. And this isn't just a temporary mismatch in supply and demand -- it could be a permanent shift in the world's silicon wafer capacity, according to a mid-December report from the market intelligence firm International Data Corporation (IDC). Phone-makers weathered the economic turmoil of tariffs by absorbing costs, but analysts predict it'll be a different story in 2026 -- and cost increases will likely be passed on to consumers. Don't miss any of our unbiased tech content and lab-based reviews. Add CNET as a preferred Google source. "In the case of the upcoming memory crisis, this is something that will hit the market hard, especially to [phone-makers] playing in the low end where margins are extremely tight," said Nabila Popal, senior research director at market intelligence firm International Data Corporation (IDC). "Those vendors will have almost no choice but to pass the increased cost to consumers." How much more expensive will phones get next year? The low end of cheap phones will likely see the biggest fluctuations. Popal expects prices in this category to spike by at least 5-10%. That's because memory makes up 15-20% of the material costs of cheaper phones, which is a higher proportion than that of pricier premium phones (around 10-15%), according to the most recent IDC report. In response, phone-makers will shift their mix of products toward the higher end, selling more expensive handsets that have higher margins, Popal predicts. This memory crisis has been disruptive enough to alter IDC's prediction of average phone prices in 2026, swinging from a slight decline to a 2% increase. While this is likely to lead to a decline in units shipped next year, increased prices are expected to drive the overall smartphone market to a record high value of $578.9 billion, according to an IDC report released in early December. Aside from raising handset prices, the memory shortage could lead phone-makers to change course from expanding the amount of RAM in their product configurations to maintaining or even reducing it. In the third quarter of 2025, over 51% of smartphones shipped had at least 8GB of RAM or more, said Francisco Jeronimo, vice president of client devices at IDC; that number rises to nearly 93% for handsets priced at $400 or above. "In 2026, entry-level and mid-range smartphones may revert to 4GB RAM configurations to preserve price in price-sensitive markets," Jeronimo said. The 8-GB threshold is significant, as it's roughly considered a baseline requirement for running on-device generative AI features, such as Galaxy AI and photo features on the Google Pixel series. While phones can and do run hybrid and fully cloud-based gen AI services, such as ChatGPT, sending requests to and from data centers results in lag time before people receive answers to their queries, and they aren't usable when underground or beyond cell service. The memory shortage has likely stalled any plans to pack the most premium phones with memory to boost AI performance, with 24GB of RAM or higher configurations scrapped for the foreseeable future, Jeronimo predicts. The upper limit on top-tier handsets is likely to be 16GB, and "Pro" variants may even revert down to 12GB to protect margins and avoid price hikes. The extent to which these impacts are detrimental depends on the duration of the memory shortage. But the shock to consumer wallets will likely lead them to wait longer to replace their phones, especially in parts of the world where handsets are bought wholesale. In markets like the US, where phones are more commonly bought on installment plans lasting two to three years, people won't see as much of a hit to their monthly bills.

Your next phone could cost 40% more with half the RAM, thanks to AI boom

Have you ever come across a post on social media where people rant about the drastic increase in prices of consumer RAM and SSD storage? It's not just noise; the numbers back it up. Take the CORSAIR Vengeance RGB PRO SL DDR4 32GB kit, for instance, in the US. For the first half of 2025, this RAM sat comfortably around USD 70 (Rs. 6,270 approx.), but as stock dried up in Q4, prices skyrocketed to USD 218 (Rs. 19,525 approx.) by December. That represents a staggering 211% surge in just six months, meaning builders are now paying triple for the exact same hardware they could have bought in July. Memory isn't a luxury component; it's the backbone of every modern computing device, including mobile devices and AI compute units. The same RAM and storage chips inside your PC or smartphone decide how smoothly apps load, how long tasks stay in memory, and how well your device multitasks. And because of these price hikes due to increased demand for storage, there's a high chance that your next smartphone/laptop will likely cost more and deliver less. The memory chip has become the silent casualty of artificial intelligence's relentless appetite for computing power. As we get used to integrating AI into everyday tasks, and as most companies like Google and Perplexity offer their best AI products completely free for a limited time, this shift has become inevitable. However, all of this comes at a cost that is now indirectly taking shape. Welcome to the memory crisis of 2025, where the AI revolution eating through data centers is now devouring your wallet. Behind every ChatGPT query and every AI image generation lies an insatiable hunger for high-bandwidth memory (HBM). HBM uses 3D-stacking technology to layer multiple DRAM dies on top of each other, used primarily in high-performance computing (HPC), artificial intelligence (AI) accelerators, and advanced graphics cards. Memory manufacturers, like SK Hynix and Micron, have made a calculated pivot away from consumer products, and the numbers are staggering. By the end of 2024, the DRAM industry allocated approximately 250,000 wafers per month, representing 14% of total capacity, to HBM production, a dramatic surge from just 93,000 wafers monthly at the end of 2023. According to TrendForce, HBM's revenue share within DRAM skyrocketed from 8.4% in 2023 to 20.1% by late 2024. SK Hynix leads this transformation with HBM production capacity exploding from 30,000 wafers annually in 2023 to a targeted 170,000 wafers in 2025. Samsung has ramped to approximately 150,000 wafers per month by the end of 2025, while Micron tripled its capacity from 20,000 to 65,000 wafers monthly. The economics are irresistible for manufacturers: HBM commands premium prices and profit margins that dwarf traditional DDR5 chips. Micron made this strategy explicit in December 2025 by announcing it would exit the consumer memory business entirely under its Crucial brand. The consequences hit consumers with brutal force. In the United States, contract prices for 16GB DDR5 chips skyrocketed nearly 300% in Q4 alone, while retail kits like the Team T-Force Vulcan surged from $82 to $310. This financial devastation isn't limited to the US or the newest DDR5 standard. Remember the CORSAIR Vengeance RGB PRO SL from our introduction? Indian consumers are facing an identical nightmare. In May 2025, that same kit cost around Rs. 10,750 (USD 120 approx.). By December, it had nearly tripled to a staggering Rs. 29,796 (USD 332 approx.), mirroring the broader Indian market, where even standard 16GB DDR5 modules climbed from Rs. 4,000 to over Rs. 12,500. Major PC manufacturers didn't absorb these costs; they passed them directly to consumers. Dell announced 15-20% price increases starting mid-December 2025 across its entire lineup. Lenovo notified customers that all current prices would expire on January 1, 2026, citing memory shortage and AI growth. Smartphones face an even more insidious problem: shrinkflation. Counterpoint Research projects smartphone average selling prices will jump 6.9% in 2026, while memory prices could rise another 40% through Q2 2026. Counterpoint Research says, DRAM price surges have already increased low-, mid- and high-end smartphone BoM costs by around 25%, 15% and 10%, respectively. We are expecting further cost impacts in the 10%-15% range through Q2 2026. But here's the twist: you'll pay more for less. TrendForce reports low-end phones will revert to just 4GB RAM in 2026, down from the 6-8GB standard. The number of phone models offering 12GB RAM has dropped approximately 40%, while 8GB models declined around 50%. Budget phones face material cost increases of 20-30%, with the bill of materials (BOM) potentially rising 8-15% above current levels by mid-2026. Industry forecasts offer zero comfort. SK Hynix predicts the memory shortage will persist through late 2027, while Micron CEO Sanjay Mehrotra expects tight memory markets past 2026. OpenAI's Stargate project alone is projected to require up to 900,000 DRAM wafers monthly by 2029, approximately double the current global monthly HBM output. Building new production capacity requires a minimum of two years, meaning relief won't arrive until 2027 or 2028. For consumers, the message is clear: budget significantly more for any tech purchase in 2026. The AI boom reshaping data centers isn't just a tech industry story; it's reaching into your pocket, one memory chip at a time. Views from Fissal Oubida, General Manager of Lexar, a leading memory solution provider,