A new report from Counterpoint Research reveals that the ongoing global shortage of DRAM, fueled by surging demand from AI applications, is set to significantly impact the smartphone market in 2026. Based on the data provided in the document, as memory buyers for AI data centers outbid phone manufacturers, the industry faces rising prices and declining shipments.
AI Systems Driving Component Demand
The report highlights that AI systems, particularly those from NVIDIA, are consuming vast quantities of components produced by major manufacturers like SK Hynix and Samsung. This shift in demand is expected to disrupt the traditional supply chain for consumer devices, with shipments projected to decline by 21% next year, a stark contrast to previous expectations of stable or improving growth.
Market Distortion and Price Increases
Furthermore, the pressure from AI players is anticipated to distort the market, with average selling prices for smartphones potentially rising by 69% in 2026, up from an earlier forecast of 36%. The chip shortage is affecting all price tiers, with low-end phones experiencing a 20-30% increase in their bill of materials since the start of the year, while mid-range and high-end devices have seen a 10-15% rise in material costs.
Impact on Consumers and Brands
As companies grapple with these increased costs, it is likely that consumers will bear the brunt, leading to a shift towards higher-priced models as brands strive to maintain revenue. Research director MS Hwang noted that while Apple and Samsung are well-positioned to navigate these challenges, Chinese brands in the mid-to-low tier will face greater pressure due to their limited ability to balance market share and profit.
In light of the recent report on the impact of AI on the smartphone market, experts are also discussing the transitional phase of consumer AI platforms. For more insights, see the full article.
