The insatiable demand for extra generative AI is spiking costs in laptop elements, which might roll into pricier smartphones subsequent yr.
Years of cryptocurrency mining have elevated the costs of laptop elements comparable to graphics playing cards. So it is not shocking to see this development proceed with the rise of generative AI and its unrelenting want for extra computing energy.
What the buyer tech world did not anticipate was a rise in demand for reminiscence, which has led to a decent market in consumer RAM for PCs in current months. That ripple impact has prolonged past computing to affect the smartphone trade as effectively.
Moderately than the reminiscence sticks that slot into PC motherboards, smartphones use specialised RAM that is miniaturized to slot in handsets. Nevertheless, with reminiscence manufacturing shifting to satisfy the demand for large orders from information facilities that deal with AI workloads, the gen AI rush is driving up costs for all sorts of RAM.
And this is not only a short-term mismatch in provide and demand — it could possibly be a everlasting shift on the planet’s silicon wafer capability, in keeping with a mid-December report from the market intelligence agency Worldwide Information Company (IDC).
Telephone-makers weathered the financial turmoil of tariffs by absorbing prices, however analysts predict it will be a distinct story in 2026 — and price will increase will probably be handed on to customers.
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“Within the case of the upcoming reminiscence disaster, that is one thing that may hit the market onerous, particularly to [phone-makers] enjoying within the low finish the place margins are extraordinarily tight,” mentioned Nabila Popal, senior analysis director at market intelligence agency Worldwide Information Company (IDC). “These distributors could have nearly no selection however to move the elevated price to customers.”
How way more costly will telephones get subsequent yr? The low finish of cheap phones will probably see the largest fluctuations. Popal expects costs on this class to spike by at the very least 5-10%. That is as a result of reminiscence makes up 15-20% of the fabric prices of cheaper telephones, which is a better proportion than that of pricier premium telephones (round 10-15%), in keeping with the newest IDC report.
In response, phone-makers will shift their mixture of merchandise towards the upper finish, promoting costlier handsets which have larger margins, Popal predicts. This reminiscence disaster has been disruptive sufficient to change IDC’s prediction of common telephone costs in 2026, swinging from a slight decline to a 2% enhance. Whereas that is prone to result in a decline in models shipped subsequent yr, elevated costs are anticipated to drive the general smartphone market to a report excessive worth of $578.9 billion, in keeping with an IDC report launched in early December.
Subsequent yr’s successors to telephones just like the iPhone 17 Professional Max and Samsung Galaxy S25 Extremely could not get extra RAM for AI performance because of the scarcity.
As reminiscence costs spike, telephones would possibly drop their RAM specs
Except for elevating handset costs, the reminiscence scarcity may lead phone-makers to alter course from increasing the quantity of RAM of their product configurations to sustaining and even decreasing it.
Within the third quarter of 2025, over 51% of smartphones shipped had at the very least 8GB of RAM or extra, mentioned Francisco Jeronimo, vp of consumer gadgets at IDC; that quantity rises to just about 93% for handsets priced at $400 or above.
“In 2026, entry-level and mid-range smartphones could revert to 4GB RAM configurations to protect worth in price-sensitive markets,” Jeronimo mentioned.
The 8-GB threshold is important, because it’s roughly thought of a baseline requirement for working on-device generative AI options, comparable to Galaxy AI and picture options on the Google Pixel collection. Whereas telephones can and do run hybrid and totally cloud-based gen AI companies, comparable to ChatGPT, sending requests to and from information facilities leads to lag time earlier than folks obtain solutions to their queries, they usually aren’t usable when underground or past cell service.
The reminiscence scarcity has probably stalled any plans to pack probably the most premium telephones with reminiscence to spice up AI efficiency, with 24GB of RAM or larger configurations scrapped for the foreseeable future, Jeronimo predicts. The higher restrict on top-tier handsets is prone to be 16GB, and “Professional” variants could even revert right down to 12GB to guard margins and keep away from worth hikes.
The extent to which these impacts are detrimental is dependent upon the length of the reminiscence scarcity. However the shock to client wallets will probably make them wait longer to exchange their telephones, particularly in elements of the world the place handsets are purchased wholesale. In markets just like the US, the place telephones are extra generally purchased on installment plans lasting two to 3 years, folks will not see as a lot of successful to their month-to-month payments.
