Smartphone Prices Set to Rise as Memory Chip Shortage Intensifies
A global shortage of memory chips is poised to significantly increase smartphone prices,with some manufacturers warning of potential hikes of up to 30 percent. The crisis, impacting everything from USB drives to data center components, stems from surging demand fueled by the rapid growth of artificial intelligence and competition for limited supply.
The scarcity of traditional DRAM and flash memory is exacerbated by manufacturers prioritizing production of High Bandwidth Memory (HBM), essential for powering AI processors like those from Nvidia. TrendForce reports that DRAM inventories were down two to four weeks as of October. While Samsung and SK Hynix have announced new capacity investments,the allocation between HBM and other memory types remains unclear.
Chinese smartphone brands like Xiaomi and Realme are already signaling price increases to consumers. realme manager Francis Wong stated the rise in memory costs is “unprecedented in the smartphone era,” predicting potential price increases of 20 to 30 percent by June.
The situation is driven by massive, open-ended orders from major tech companies. Google, Amazon, Microsoft, and Meta have reportedly told Micron they are willing to purchase “as much as you can,” irrespective of price. Alibaba, ByteDance, and Tencent have also sought increased supply from Samsung and SK Hynix.
The shortage isn’t limited to smartphones. In Japan,stores are imposing limits on hard disk sales to prevent stockpiling,and prices for components like DDR5 RAM have risen sharply in recent weeks,boosting the second-hand market.
SK Hynix chairman chey Tae won warns the shortage coudl persist until the end of 2027,adding that companies unable to secure sufficient supply risk going out of business. He noted the high demand, stating, “manny companies wont supplies.”
Experts are increasingly concerned about the broader economic implications. Sanchit Vir Gogia, CEO of Greyhound Research, believes the crisis has evolved from a component-level issue into a “macroeconomic risk,” highlighting how AI investments are pushing the limits of the physical supply chain.
