Global Memory Chip Crunch Expected to Push Smartphone Prices Higher

Consumers may soon feel the impact of a global memory chip shortage, as manufacturers and analysts warn that prices for smartphones, laptops and other electronic devices are likely to rise next year. The surge in demand for AI data centres is putting immense pressure on supplies of key memory components traditionally used in consumer gadgets.

Tech giants are pouring unprecedented amounts of money into building infrastructure capable of powering advanced AI systems such as ChatGPT. This has created intense competition for DRAM and NAND chips — essential memory and storage components that are now heavily consumed by AI servers.

The supply chain is already strained, and industry experts predict the situation will worsen. Xiaomi President Lu Weibing said this week that 2026 will bring even greater supply pressure than the current year. He warned that consumers should expect a “significant increase” in retail prices across a range of electronic products.

William Keating, head of consulting firm Ingenuity, echoed the concern, noting that shortages will affect companies manufacturing PCs, smartphones and servers. The inevitable consequence, he said, is higher prices for end users.

Memory chip makers such as Samsung, SK hynix, Micron and SanDisk are benefitting from this surge in demand. Prices for memory components have already entered a robust upward cycle, and analysts believe this momentum will continue well into next year. Samsung recently reported a major spike in demand from AI-related servers, while SK hynix posted its strongest quarterly performance yet due to rising DRAM and NAND prices.

TrendForce, a major industry analysis firm, has cut global production forecasts for smartphones and laptops in 2026. Their data suggests the memory market’s upward pricing cycle is forcing downstream brands to raise retail prices accordingly.

The impact may extend beyond personal electronics. While cars rely less heavily on memory chips than mobile devices, Keating noted that automotive technology could still be affected by constrained supply.

The shortage stems from two major factors: AI-driven demand exceeding earlier expectations and memory chip manufacturers intentionally limiting capacity expansions. Analysts say chipmakers have kept production tight to avoid a repeat of past price crashes that resulted in massive financial losses.

Stephen Wu, founder of Carthage Capital, said the industry should prepare for higher chip prices, longer wait times and more restrictive supply contracts until at least early 2026. He described the current price increases as “huge,” warning that the trend shows no signs of slowing down.

As AI infrastructure continues to expand globally, consumers may have little choice but to brace for higher prices across a wide range of devices.