Global memory chip shortages threaten to push smartphone prices up by 15–20%

Global shortages of memory chips, fueled by soaring demand from artificial intelligence (AI) applications, could drive smartphone prices up by 15 to 20% in the coming months if supply constraints persist, industry analysts have warned.

The pressure stems primarily from surging prices of DRAM and NAND memory chips, essential components in smartphones, computers, and vehicles.

Spot prices for DRAM have risen more than 600% in recent months, while NAND prices have also spiked as global demand for data storage expands alongside AI infrastructure development.

Analysts describe the shortage as a structural shift rather than a temporary disruption. Semiconductor manufacturers are redirecting production toward high-bandwidth memory (HBM), specialized chips used in AI accelerators, tightening supply for conventional memory used in consumer electronics.

This has led industry observers to dub the phenomenon a memory “supercycle,” breaking the sector’s historical boom-and-bust pattern. Traditionally, memory cycles lasted three to four years, but current demand has exceeded previous peaks in both duration and intensity.

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“We stand at the cusp of something that is bigger than anything we’ve faced before,” said Tim Archer, CEO of chip equipment supplier Lam Research Corp., at a conference in South Korea. “What is ahead of us between now and the end of this decade, in terms of demand, is bigger than anything we’ve seen in the past, and will overwhelm all other sources of demand.”

Bloomberg reports that global tech leaders, including Elon Musk and Apple CEO Tim Cook, have been raising concerns over the emerging crisis, highlighting how chip shortages are affecting profits, delaying corporate plans, and inflating prices for laptops, smartphones, automobiles, and data centers.

Chinese smartphone manufacturers, including Xiaomi Corp., Oppo, and Shenzhen Transsion Holdings Co., are already adjusting shipment targets for 2026. Oppo has reportedly cut its forecast by as much as 20%, according to Chinese media outlet Jiemian.

Hyperscale technology companies, such as Amazon, have accelerated AI infrastructure investments, further increasing demand for advanced memory. This surge leaves fewer resources available for standard consumer devices, creating a divergence reflected in financial markets.

Shares of memory manufacturers like SK Hynix have surged over 150% amid AI-driven demand, while consumer electronics companies reliant on affordable memory components have seen declining valuations.

Memory is central to modern smartphones, powering AI features, high-resolution cameras, and multitasking performance. Rising component costs therefore directly affect manufacturing expenses and retail pricing.

In Nigeria, where the smartphone market is heavily import-dependent, retailers are particularly exposed to global price swings. Analysts expect gradual price increases rather than immediate shortages, as distributors adjust to higher procurement costs.

Traders in electronics hubs such as Computer Village in Lagos report that some are stocking inventory ahead of anticipated price hikes, while others are limiting purchases to reduce exposure to volatility. Mid-range smartphones, which balance affordability with competitive specifications, are expected to face the greatest pressure, with manufacturers likely to raise prices, reduce base storage, or delay feature upgrades.

Preliminary estimates from Counterpoint Research’s Market Monitor show that worldwide smartphone shipments grew for the second consecutive year in 2025, with a 2% year-on-year increase. Apple led the market with a 20% share and 10% growth, Samsung followed with 19% and 5% growth, while Xiaomi, vivo, and Oppo trailed behind.

However, the ongoing chip shortage could disrupt this growth in 2026, potentially shrinking the global smartphone market as manufacturers cut shipments and adjust to higher costs.