Global RAM Shortage Could Drive Smartphone Prices Higher, Push Budget Phones Out of the Market

When artificial intelligence became a trend, the rest of the tech firms followed. With companies aiming to build powerful AI data centers, demand for memory components, especially RAM, has surged, pushing prices to record highs and forcing electronics manufacturers to rethink production strategies.

We might not feel the impact of these events yet, but even budget smartphones might get affected.

Smartphones Could See Production Slowdowns in 2026

Industry analysts warn the impact will extend far beyond AI servers. International Data Corporation (IDC) projects that global smartphone shipments could drop by 13% in 2026 compared with 2025.

Distributors have been stockpiling devices early in the year, maintaining stable sales in the first quarter, but production disruptions are expected to intensify between April and June as memory shortages hit manufacturers.

RAM prices have already tripled compared to last year, forcing smartphone makers to either raise prices or reduce production volumes, creating uncertainty across the market.

Budget Smartphones at Greatest Risk

Budget smartphones face the highest risk, as low-cost devices operate on tight profit margins. Soaring RAM prices could wipe out profitability for devices priced around $150, where memory may account for half the production cost.

According to CNET, analysts estimate that if budget phones disappear, nearly 10% of the global smartphone market could vanish, leaving a gap in affordable devices for consumers.

Continuous Price Increase For Smartphones

Manufacturers have already started raising prices on several new flagship smartphones, while other upcoming models have not announced final pricing due to supply uncertainty. Companies are hesitant to set prices too early, fearing cost spikes before product launches.

Even Xiaomi believes that 2026 smartphones will get pricier because of the rising costs of AI operations.

When Will the RAM Shortage End?

Experts predict the shortage will persist for 18 to 24 months, as building new memory factories takes years. While prices will eventually stabilize, analysts caution that memory costs may never return to 2025 levels, signaling lasting effects on smartphones, PCs, and broader consumer electronics.