Fancy cameras, big screens and massive storage often make smartphones costlier. But next 12 months, it’s a routine element that might be boosting costs: reminiscence.
And it’s not simply telephones. Any system that makes use of reminiscence, from telephones to tablets and smartwatches, may get pricier.
Memory costs are rising for client merchandise as a result of main producers are as an alternative ramping up manufacturing for AI knowledge facilities as synthetic intelligence corporations boom.
“It’s pretty much brutal and crunched across the board,” mentioned Yang Wang, a senior analyst at Counterpoint Research.
The International Data Corporation, a world market analysis agency, reported earlier this week that the smartphone market is anticipated to say no by 0.9% in 2026 partially due to reminiscence shortages. Memory costs are anticipated to surge by 30% in the fourth quarter of 2025 and will climb a further 20% early next 12 months, Counterpoint Research mentioned final month.
A boom in knowledge heart demand
Tech corporations like Meta, Microsoft and Google have aggressively expanded their data centers and infrastructure this 12 months to maintain up with AI demand. And that progress is anticipated to proceed: A report from McKinsey & Company signifies corporations will make investments almost $7 trillion in knowledge heart infrastructure-related prices globally by 2030.
That’s prompted reminiscence producers like Micron and Samsung to shift their focus to knowledge facilities, which use a different type of memory than computer systems and smartphones. As a end result, there are fewer assets for client merchandise, mentioned Wang.
Memory and storage firm Micron announced on Wednesday that it’s exiting the client reminiscence enterprise, citing a “surge in demand” coming from “AI-driven growth” in knowledge facilities.
Jaejune Kim, government vice chairman for reminiscence at Samsung, mentioned in October that the firm noticed robust demand for reminiscence for AI and knowledge facilities in the third quarter. He additionally mentioned the provide scarcity for cell and PC reminiscence is anticipated to “intensify further.”
Gadget makers could must face powerful choices about when to launch and value their merchandise, analysts say. TrendForce, a analysis agency that follows the semiconductor trade, estimates reminiscence value hikes have made smartphones 8% to 10% costlier to supply in 2025 (increased manufacturing prices don’t all the time translate into increased client costs for quite a lot of causes).
Some smartphones may price extra as quickly as early next 12 months, mentioned Nabila Popal, a senior analysis director for the International Data Corporation. Cheap Android telephones may even see the greatest influence, since inexpensive merchandise often have thinner margins.
“It’s going to be almost impossible for them to not raise prices” of cheaper Android telephones, mentioned Popal.
Companies may additionally postpone cellphone launches to concentrate on costly fashions that could be extra worthwhile. The common promoting value for smartphones is anticipated to climb to $465 in 2026, in comparison with $457 in 2025, in keeping with Popal, placing the smartphone market at a document excessive worth of $578.9 billion.
But the pendulum is anticipated to swing again in the different path late next 12 months as the provide chain adjusts, in keeping with Popal and Wang, doubtlessly bringing costs again down or at the least capping will increase.
The semiconductor trade is used to grappling with change as new applied sciences emerge, says Wang. But it could haven’t been ready for a way shortly AI demand would develop.
“In the semiconductor space, there’s always going to be a mismatch (in supply and demand),” he mentioned. “This was kind of unexpected.”