02.09.2026 14:20
A noteworthy development has occurred that closely concerns those looking to buy a new mobile phone. As the global memory shortage caused by artificial intelligence investments rapidly increases phone production costs, leading research institutions in the sector have pointed out that the era of cheap smartphones may come to an end.
There are developments that closely concern consumers considering buying a new mobile phone. The accelerating investments in artificial intelligence worldwide are affecting not only the competition among technology companies but also the prices of electronic devices used in daily life.
The increase in the memory needs of the massive data centers where AI systems are operated has led to a global supply shortage of DRAM and NAND chips used in smartphones. As a result, phone manufacturers' costs have risen significantly.
AI HITS PHONE PRICES
At the root of the problem are the massive investments made by the world's largest technology companies in AI infrastructure.
The purchase of large amounts of high-performance memory for data centers by companies such as Microsoft, Amazon, Google, and Meta is causing manufacturers to divert their capacity to this area.
Major memory manufacturers like Samsung, SK Hynix, and Micron focusing on high-bandwidth memory used in AI systems is squeezing the supply of traditional memory chips used in phones and computers.
PRICES RISE BY 27.6 PERCENT
IDC's latest forecasts have revealed the scale of the situation. According to the organization, the average selling price of smartphones worldwide is expected to increase by 27.6 percent in 2026, reaching $581.
Conversely, global smartphone shipments are estimated to decline by 16.7 percent, remaining just above 1 billion. Thus, while the number of phone sales decreases, the industry's total revenue is expected to continue increasing.
THE BIGGEST BLOW IS TO CHEAP PHONES
The segment most affected by the cost increase has been entry-level phones. IDC notes that rising memory costs have effectively ended the smartphone segment priced below $100.
According to Omdia's analysis, in phones priced below $400, memory costs now account for up to approximately 60 percent of the device's total component cost. Therefore, low-priced models are losing profitability for some manufacturers.
To reduce costs, manufacturers have begun opting for cheaper screens, camera sensors, and other components. However, the already low profit margins in entry-level devices are increasingly limiting companies' room for maneuver.
PHONE PRICE INCREASES MAY CONTINUE
Gartner's forecasts also do not paint an optimistic picture for consumers. The company predicts that the total increase in DRAM and SSD prices could reach 130 percent by the end of the year, potentially raising smartphone prices by about 13 percent compared to 2025.
TrendForce, on the other hand, expects mobile DRAM prices used in phones to rise by an additional 8-13 percent in the third quarter of 2026 compared to the previous quarter. Since memory manufacturers continue to shift capacity to server and AI products, prices are not expected to decline significantly in the short term.
THE SHORTAGE COULD LAST AT LEAST 2 YEARS
According to industry experts, since bringing new production capacity online takes time, the memory shortage may not be resolved quickly. Experts assess that it could take at least two years for the supply shortage and high prices to ease.
This situation may lead consumers to use their phones for longer periods, turn to second-hand and refurbished devices, or allocate higher budgets to buy a new phone. IDC's assessment summarizes where the industry stands: The era of cheap smartphones is now coming to an end.