RAM Shortage Could Make Budget Smartphones Unsustainable, Warns IDC
In Focus
- Smartphone shipments expected to drop 12.9% globally in 2026
- Severe DRAM shortage dubbed “RAMageddon” drives higher device costs
- Budget phones below ₹9,000 face production challenges and price hikes
Global smartphone shipments are expected to fall sharply in 2026, with the International Data Corporation (IDC) forecasting a 12.9% drop, marking the steepest decline in over a decade. According to The Indian Express, a severe RAM shortage caused by increasing demand for AI infrastructure is constraining supply and raising production costs.
Analysts warn that the ongoing AI memory shortage is affecting device availability across all price segments. The RAM price hike in smartphone market is driving up average selling prices, particularly for budget phones.
Budget Phones Hit Hard
The shortage has disproportionately affected smartphones priced below ₹9,000, which may become permanently uneconomical to manufacture. Smaller OEMs focused on budget devices face significant challenges, while financially bigger companies are absorbing rising costs.
IDC also highlighted regional variations, with the Middle East and Africa seeing declines nearly 20%, followed by Asia Pacific region and China. Experts noted that the decline of smartphone sales in 2026 is not a temporary cycle but a structural shift, caused by the prioritization of memory for AI systems.
“While memory prices are projected to stabilize by mid-2027, they are unlikely to return to previous level,” Nabila Popal, a senior researcher at IDC, stated, as cited by The Indian Express.
Smartphone Prices Surge as RAM Shortage Tightens Supply
Micron Technology warned last month that the AI memory shortage will continue past 2026, as memory for AI servers takes up capacity once used for smartphones. Samsung and SK Hynix are prioritizing the production of high-performance memory, further tightening DRAM availability for mobile devices.
Analysts from Counterpoint suggest that the RAM price hike in the smartphone market could push average smartphone costs up by nearly 7% in 2026. Some manufacturers may adjust device specifications to partially offset rising costs, but the overall effect points to a high-price environment.
How Top Brands Plan to Sustain Amid the RAM Shortage
The prolonged RAM shortage and related AI memory shortage are set to reshape the global smartphone market, pushing prices higher and reducing shipments. Major brands are leveraging AI capabilities to maintain differentiation despite cost pressures.
Reports highlight how Apple Intelligence vs Galaxy AI strategies allow Apple and Samsung to optimize memory usage and deliver advanced AI features, giving them a competitive edge in the tight market.
