The race to build AI infrastructure has gobbled up so much memory that prices have skyrocketed, with analysts predicting that product costs will rise as a result. But the outlook is far worse than anticipated. New reports and forecasts suggest that the RAM shortage could prompt manufacturers of cheaper devices to reduce or even stop production for some time.
Smartphone shipments are expected to drop by 13% through 2026 compared with last year, according to the International Data Corporation. This won't just be a temporary crisis, but "a tsunami-like shock originating in the memory supply chain, with ripple effects spreading across the entire consumer electronics industry," Francisco Jeronimo, vice president for Worldwide Client Devices at IDC, had previously said in a statement.
When reached at MWC 2026, Jeronimo predicted that this impact won't happen immediately. Phone sales will stay pretty static over the first quarter of the year (which is almost over) as distributors buy as much stock as they can, but the shortage will start affecting phone production around the second quarter, between April and June.
Phones are already getting more expensive, as analysts predicted. The Samsung Galaxy S26 and S26 Plus, which both launched with a $100 price hike over their predecessors -- though they also bumped the minimum storage to 256GB from 128GB. But the premium segment likely won't be as affected as lower-cost, higher-volume phones, said Anshel Sag, principal analyst at Moor Insights and Strategy.
"That's why you're already seeing the Chinese [phone manufacturers] have to jack up prices already," Sag said.
With the shortage, RAM prices are spiking, reaching three times last year's levels, according to a Counterpoint Research report released at the end of February. The cheapest devices, already on thin margins, will likely see their profits evaporate. At that point, it's not worth selling those phones.
"Some vendors are telling us that they are considering leaving that [budget] segment entirely, because if you sell a phone for $150, and half the cost is memory, where will you make money? There's no point in selling products, right?" Jeronimo said.
If the cheapest budget segment drops out of the phone industry over the next year, that's 10% of the global market that will be gone, Jeronimo noted.
The shortage is already affecting plans for the prices of phones set to launch. At MWC 2026, several phones were shown off without finalized prices, like the Unihertz Titan 2 Elite shown off at MWC that is soon being sold on Kickstarter. Before the RAM shortage, the price of an upcoming phone would be set weeks or months in advance of its release to store shelves. Now, it's too risky to name a price until just before it's sold. They just might not have enough memory to even supply the first batch of products at the preset price, Jeronimo said, and potentially raise prices thereafter.
As an example, the base Xiaomi 17 recently launched at 999 euros, but Jeronimo predicted that "the price they announced on stage is not the price they [will] see [the phone at]. The price in the store, in many operations, will be 100 euros more than what they said on stage," he said.
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