The AI chip shortage could significantly impact smartphone prices, with new research predicting a substantial price hike. By 2026, smartphone shipments may decline by 2.1%, according to Counterpoint Research, a stark contrast to the previous forecast of flat-to-positive growth. This decline is attributed to the shortage of memory chips, which are crucial for AI applications. The average selling price of smartphones is expected to surge by 6.9% year-on-year in 2026, primarily due to specific chip shortages and bottlenecks in the semiconductor supply chain. This, in turn, is driving up component prices, with a particular focus on dynamic random-access memory (DRAM) used in AI data centers. DRAM prices have skyrocketed this year, outpacing supply. Consequently, the cost of producing low-end smartphones priced below $200 has increased by 20% to 30% since the beginning of the year. Mid and high-end smartphones are also affected, with material costs rising by 10% to 15%. Counterpoint Research predicts that memory prices could surge another 40% through Q2 2026, leading to a significant increase in BoM (Bill of Materials) costs, which may be passed on to consumers. This situation could benefit Apple and Samsung, but smaller players with less flexibility may struggle to manage market share and profit margins, especially in the Chinese smartphone market.
