GoKawiilBubbling Costs: Carl Pei is adding his voice to a growing list of industry insiders pointing to the rapid changes driven by the AI investment boom. RAM is now more expensive than ever, and consumer devices will likely have to adapt to these higher component costs.
Nothing co-founder and CEO Carl Pei has said that AI is making components significantly more expensive, warning that a reckoning is coming for consumers buying new devices. In a recent post shared on his X account, Pei said memory chips now account for more than 50% of the total hardware bill of materials in a smartphone.
DRAM – and, likely, solid-state storage as well – has become the most expensive element in a phone's bill of materials. Pei illustrated how rising costs are affecting his company's business: for Nothing's Phone (4a), the cost of memory chips has more than doubled between the design phase and launch, and then doubled again.
– Carl Pei (@getpeid) June 12, 2026
Pei previously highlighted the impact of rising memory prices earlier this year, saying 2026 would be a "truly unprecedented" year for the consumer electronics industry. Smartphone makers have traditionally relied on a simple assumption: that hardware components would gradually get cheaper over time. Demand for chips from AI data center buildouts has disrupted that pattern, reshaping supply chains and driving memory prices sharply higher.
Pei said this shift is now fully underway and accelerating faster than expected. The result, he argued, is that smartphone prices are rising and are likely to continue doing so into next year. New phone models released since February 2026 have launched at prices about $100 higher than previous generations. In India, one of Nothing's key markets, phones previously priced above ₹30,000 now carry price tags roughly ₹7,000 higher.
The idea that device makers can solve the issue simply by stocking up on chips ahead of the manufacturing phase no longer holds. Memory products are now allocated by chip manufacturers, leaving device companies such as Nothing to take what they are given – regardless of cost.
Pei offered a final piece of advice for users looking to buy a new smartphone or other consumer electronics device: "If you've been waiting to upgrade a device, the best time was yesterday. The next best time is now. This year's sales season won't have the discounts people are used to."
Rising memory prices and ongoing shortages are expected to ripple across the industry, with smartphones and PCs among the sectors most affected. Earlier this year, HP CFO Karen Parkhill said that memory's share of a PC's bill of materials has risen to more than 30%.