AI Chip Shortage to Increase Smartphone Prices in 2026, Counterpoint Says
In Focus
- Counterpoint Research projects a 2.1% drop in smartphone shipments
- The price increase will be triggered by memory chip shortage
- Smartphone manufacturers are likely to pass cost to customers
Smartphone prices are likely to rise in 2026, a note by Counterpoint Research shows. According to CNBC, the price hike will be triggered by an AI chip shortage that’s being driven by industry players and dipping smartphone shipments.
Counterpoint Research estimates a 2.1% drop in smartphone shipments in 2026. While shipments may not be equal to sales, they are clear indicators of demand because they provide data on devices being dispatched to different sales outlets like stores.
Why Are Smartphone Prices Expected to Rise in 2026?
Chip shortages and supply chain challenges have been raising component prices in recent months. These challenges have been triggered by the rush to establish data centers globally. This has in turn increased demand for AI semiconductors as the market grows.
The U.S. chipmaker relies on SK Hynix and Samsung, which are the largest memory chip producers, for the supply of important components like dynamic random-access memory (DRAM). SK Hynix announced mass production of HBM4, the DRAM standard that was first manufactured in 2013.
While DRAM is mostly used in AI data centers, it is also an important component in smartphone production. This year, demand for DRAM has exceeded supply, with SK Hynix reporting an influx in semiconductor orders in March 2025.
Counterpoint Research estimates that these supply chain constraints could result in a 6.9% rise in smartphone prices in 2026. This jump represents a 3.3% increase compared to the company’s previous 3.6% forecast.
Smartphone Material Costs to Increase Further
DRAM price surge will have a direct impact on smartphone production costs. According to Counterpoint Research materials cost, which is the price of manufacturing a single smartphone, has risen by 20% to 30% for smartphones priced below $200 since the beginning of 2025.
Material costs for high-end and mid-range smartphones have risen by 10% to 15% since over the same period. According to Counterpoint, production costs might continue to rise in the first half of 2026.
“Memory prices could rise another 40% through Q2 2026, resulting in BoM costs increasing anywhere between 8% and over 15% above current elevated levels,” Counterpoint said, as per CNBC.
Coping with Rising Production Costs
Smartphone makers will have to find ways to cope with the rising production prices. Some will likely pass the cost to customers, which means an increase in device prices.
“Apple and Samsung are best positioned to weather the next few quarters. But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins,” Counterpoint Research Director MS Hwang said, as stated by CNBC.
Still, some smartphone makers are expected to downgrade features such as displays, cameras, and audio or reuse old components as a way of keeping production costs low.
