The insatiable demand for extra generative AI is spiking costs in laptop components, which might roll into pricier smartphones subsequent yr.
Years of cryptocurrency mining have elevated the costs of laptop components corresponding to graphics playing cards. So it isn’t stunning to see this development proceed with the rise of generative AI and its unrelenting want for extra computing energy.
What the patron tech world did not anticipate was a rise in demand for reminiscence, which has led to a good market in consumer RAM for PCs in current months. That ripple impact has prolonged past computing to impression 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. Nonetheless, with reminiscence manufacturing shifting to satisfy the demand for enormous 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 non permanent mismatch in provide and demand — it might be a everlasting shift on the planet’s silicon wafer capability, based on 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’s going to be a special story in 2026 — and value will increase will doubtless be handed on to customers.
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“Within the case of the upcoming reminiscence disaster, that is one thing that can hit the market onerous, particularly to [phone-makers] taking part in 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 can have virtually no alternative however to cross the elevated price to customers.”
How way more costly will telephones get subsequent yr? The low finish of cheap phones will doubtless see the most important fluctuations. Popal expects costs on this class to spike by at the least 5-10%. That is as a result of reminiscence makes up 15-20% of the fabric prices of cheaper telephones, which is the next proportion than that of pricier premium telephones (round 10-15%), based on the latest 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% improve. 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 file excessive worth of $578.9 billion, based on 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 might not get extra RAM for AI performance because of the scarcity.
As reminiscence costs spike, telephones may drop their RAM specs
Other than elevating handset costs, the reminiscence scarcity could lead on phone-makers to alter course from increasing the quantity of RAM of their product configurations to sustaining and even lowering it.
Within the third quarter of 2025, over 51% of smartphones shipped had at the least 8GB of RAM or extra, mentioned Francisco Jeronimo, vice chairman of shopper units at IDC; that quantity rises to just about 93% for handsets priced at $400 or above.
“In 2026, entry-level and mid-range smartphones might revert to 4GB RAM configurations to protect value in price-sensitive markets,” Jeronimo mentioned.
The 8-GB threshold is critical, because it’s roughly thought-about a baseline requirement for working on-device generative AI options, corresponding to Galaxy AI and photograph options on the Google Pixel collection. Whereas telephones can and do run hybrid and absolutely cloud-based gen AI providers, corresponding to ChatGPT, sending requests to and from information facilities ends in lag time earlier than individuals obtain solutions to their queries, and so they aren’t usable when underground or past cell service.
The reminiscence scarcity has doubtless stalled any plans to pack essentially 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 might even revert all the way down to 12GB to guard margins and keep away from value hikes.
The extent to which these impacts are detrimental will depend on the length of the reminiscence scarcity. However the shock to client wallets will doubtless cause them to wait longer to switch their telephones, particularly in components 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, individuals will not see as a lot of a success to their month-to-month payments.
