The race to build an AI infrastructure has boosted memory to such an extent that prices have skyrocketed, with analysts predicting that product costs will rise as a result. But the outlook is worse than expected. New reports and predictions suggest that the shortage of RAM may cause manufacturers of cheap devices to reduce or stop production for some time.
Smartphone shipments are expected to decrease by 13% in 2026 compared to the previous year, according to the International Data Corporation. This will not be a short-term problem, but a “tsunami-like shock from the memory supply chain, with dramatic effects that spread throughout the consumer electronics industry,” Francisco Jeronimo, vice president of Worldwide Client Devices at IDC, had previously said in a statement.
When it was reached at MWC 2026, Jeronimo predicted that this impact would not happen quickly. Phone sales will remain flat during the first quarter of the year (which is about to end) as distributors buy as much stock as possible, but shortages will begin to affect phone production in the second quarter, between April and June.
Phones are already more expensive, as analysts predicted. The Samsung Galaxy S26 and S26 Plus, both launched with a $100 price increase over their predecessors — though they also reduced the minimum storage to 256GB from 128GB. But the premium segment probably won’t be as affected as low-cost, high-volume phones, said Anshel Sag, principal analyst at Moor Insights and Strategy.
“That’s why you can see the Chinese [phone manufacturers] you have to raise the prices already,” said Sag.
With the shortage, RAM prices are rising, reaching three times last year’s levels, according to a Counterpoint Research report released at the end of February. Cheaper devices, already in smaller niches, will likely see their profits evaporate. At that time, it is not worth selling those phones.
“Some traders told us that they are thinking of leaving it [budget] half completely, because if you sell a phone for $150, and half the cost is memory, where are you going to make money? There’s no need to sell products, right?” said Jeronimo.
If the cheapest part of the budget goes down in the phone industry next year, that’s 10% of the global market that will be gone, Jeronimo noted.
The shortage has already hampered plans to introduce phone rates. At MWC 2026, a few phones were shown without finalized prices, such as the Unihertz Titan 2 Elite shown at MWC that is soon to be sold on Kickstarter. Before the RAM shortage, the price of an upcoming phone would be set weeks or months before its release to stock the shelves. Now, it is very dangerous to say the price until it is sold. They may not have enough memory to offer the first batch of products at a pre-set price, Jeronimo said, and may raise prices after that.
For example, the Xiaomi 17 base that was recently launched at 999 euros, but Jeronimo predicted that “the price they announced on stage is not the price [will] see [the phone at]. The price in the shop, in most activities, will be 100 euros more than what they say on stage,” he said.
Samsung Galaxy S26 Ultra and iPhone 17 Pro Max
When will the RAM problem end?
Unlike last year’s taxes and financial fluctuations that phone makers focused on, RAM shortages are inevitable — there’s very little of these components to go around.
“This is not a temporary thing,” said Jeronimo. “You cannot build 1,000 factories in three or four months. [That would] it takes two to three years.”
In current IDC forecasts, the crisis won’t last that long — only one and a half to two years, Jeronimo explained. That can be shortened if other, small-scale suppliers start to produce memory and reduce the shortage, but the conditions he reported are bad, RAM manufacturers need to be paid in advance to ship periodically in the hope that the next execution of units will cost more.
But the IDC analyst also laid out another possible reduction that floated late last year – that manufacturers will reverse their previous course of increasing RAM with each generation and cut it for the next. Even if it were cheaper to use less memory in phones, it would reduce the experience significantly, causing too many retailers to return their phones due to poor performance, Jeronimo explained. RAM isn’t just used to run AI models — it also allows people to keep multiple apps open and running at the same time.
On the industry side, large companies are not talking about their shortages and have even announced that they will not answer questions when the press conferences begin.
Understandably, higher phone prices may lead people to hold off on upgrading, extending the length of time they keep their current phones, said Dipanjan Chatterjee, vice president and principal analyst at Forrester. The burden is on the shoulders of brands to combat this development fatigue in two ways, he said: divide the revenue streams to rely more on non-telephone sales, as Apple is doing with its services, and secondly, add bells and whistles to make price increases more palatable.
Therefore, Samsung increases the storage of the Galaxy S26 in line with its price increase. And Samsung itself is in a better position to capture sales with its tradition of strong deals and incentives during product launches. When the Galaxy S26 series was launched, it also offered trade-in and promotional deals to offset the $100 price increase, including pairing other gadgets with its phones.
While the lack of RAM is the main factor behind this price increase, other factors are at play. Global instability, including the recent war in the Middle East, is forcing transportation back outside of non-fly zones, driving up the cost of transportation. Parts across the board are getting more expensive, too.
The good news is that this price increase will not last forever. Ultimately, the race to build more AI data centers will slow down, and as more memory is built, prices will stabilize. But like all other consumer goodies that have seen price increases, they likely won’t be down to where they were before.
“I don’t think the memory price will drop to the same level as last year,” said Jeronimo.
