Memory is a significant part of a smartphone’s bill of materials. When mobile DRAM and NAND flash become more expensive or harder to secure, manufacturers can raise prices, accept thinner margins, ship less memory at the same price, change which models they build, or reduce production. The effect is strongest in low-cost phones, but a global memory squeeze can influence prices and availability across the market.
What “memory” means in a smartphone
Two semiconductor categories matter most here:
- Mobile DRAM, including LPDDR, is the phone’s working memory. It holds the operating system and active apps while the device is running.
- NAND flash is non-volatile storage for the operating system, photos, apps and other files. It is the technology behind built-in capacities such as 128GB and 256GB.
These chips are soldered or integrated into the handset’s design. A buyer generally cannot open a phone and upgrade internal RAM in the way a desktop owner might add a memory module. Some models may offer removable storage, but manufacturers’ current specifications must be checked individually to determine which models do.
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Memory is not the entire cost of a phone. The bill of materials also includes the display, application processor, cameras, modem and radio components, battery, enclosure, assembly, software, logistics and other items. Memory nevertheless represents enough of the hardware cost that a sustained change in DRAM or NAND pricing can alter a phone’s economics.
How a memory shortage reaches the retail shelf
Capacity is being pulled toward higher-margin uses
Memory manufacturers serve many markets with finite cleanroom capacity and capital spending. IDC reported in December 2025 that suppliers were directing more space and investment toward higher-margin enterprise components, including high-bandwidth memory (HBM) used in AI systems. That allocation can leave less conventional DRAM capacity for consumer products, including the LPDDR used in phones. AI demand is an important source of competition for supply, but it is not the only possible cause of every memory-price movement.
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NAND follows a related supply-and-demand logic. If suppliers restrain output, shift investment, or face stronger orders from other device categories, phone makers may pay more for the storage chips they need. Contract prices negotiated between suppliers and manufacturers can change before a consumer sees a new retail price.
Manufacturers have several ways to absorb the shock
A handset company does not automatically add the entire component increase to the sticker price. It can combine several responses:
- Pass through the cost. The phone launches at a higher price, or a later production batch receives a price increase.
- Accept a lower margin. The company keeps the advertised price to protect market share, sacrificing some profit per device.
- Change the specification. A model can ship with less RAM or storage while retaining a similar price. IDC gave a possible example of moving from 12GB of RAM and 256GB of storage to 8GB and 128GB; that is an illustration of a strategy, not a claim that every brand has made that change.
- Alter the model mix. A manufacturer may emphasize premium products, delay a low-margin launch, reduce the number of configurations, or discontinue a variant.
- Cut output. If the expected selling price cannot cover the new cost, fewer units may be built.
The choice depends on a company’s margins, inventory, contracts, purchasing scale and expectations about demand. A component-price increase therefore does not translate into a fixed percentage increase for every phone.
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How large is memory’s share of phone cost?
Different analysts use different product definitions and dates, so their estimates should not be combined into one universal percentage.
| Source and date | Product or measure | Estimate | What it means |
|---|---|---|---|
| IDC, December 2025 | Mid-range smartphone bill of materials | 15–20% | IDC’s estimate of the bill of materials represented by memory for this tier. |
| IDC, December 2025 | High-end flagship bill of materials | About 10–15% | A lower share than IDC estimated for a mid-range phone, because other flagship components account for more of the hardware cost. |
| TrendForce, February 11, 2026 | Mainstream phone with 8GB RAM and 256GB storage | Historically 10–15%; estimated 30–40% in its 2026 market scenario | A configuration-specific estimate tied to TrendForce’s stated market moment, not a percentage for every handset. |
These figures describe a share of hardware cost, not the amount a buyer should expect to see added at checkout. Retail pricing also includes research and development, distribution, taxes, marketing, warranty costs, currency effects and the company’s margin. A 10% increase in one component cannot be read as a 10% increase in the final phone price.
Why cheaper phones are more exposed
Entry-level and lower-mid-range phones usually operate with thinner margins. Their customers are more price-sensitive, leaving less room to raise the shelf price without losing sales. A memory increase that a premium model can absorb may make a budget model unprofitable.
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That does not mean every inexpensive phone will disappear. The likely adjustments are more selective:
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- fewer RAM and storage combinations;
- delayed launches while supply is secured;
- smaller production runs;
- higher prices or reduced specifications;
- retirement of models whose margins no longer cover their costs.
Brands also have unequal bargaining power. IDC describes larger companies with stronger supplier relationships and volume commitments as better positioned to obtain allocations during a shortage. TrendForce has assessed that Samsung could benefit from vertical integration and that Apple’s premium mix may provide more customer price tolerance. The same analysis identifies entry-level-heavy Xiaomi and Transsion as more exposed. These are analyst assessments and forecasts, not guaranteed outcomes for any individual brand, country or model.
What the 2026 forecasts actually measure
Several widely cited figures refer to different things. Keeping the measure and publication date attached prevents an apparent contradiction from becoming a misleading headline.
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| Publisher and date | Measure | Forecast | Important qualification |
|---|---|---|---|
| IDC, February 26, 2026 | Worldwide smartphone shipments | 12.9% decline in 2026 | Shipments are units delivered into the market, not the number manufactured or the price of each phone. |
| TrendForce, February 11, 2026 | Global smartphone production | 10% reduction, to about 1.135 billion units; bear case of 15% or more | Production estimates and a downside scenario, distinct from IDC’s shipment forecast. |
| IDC, later 2026 forecast | Worldwide smartphone shipments | 16.7% decline, to just over 1 billion units | A later forecast that replaced the earlier outlook; it is still a forecast, not a final annual result. |
| IDC, later 2026 forecast | Worldwide smartphone average selling price | 27.6% rise, to $581 in 2026 | An average across the market, not a claim that every model’s shelf price rises by 27.6%. |
| TrendForce, July 3, 2026 | Component contract prices for Q3 2026 | Conventional DRAM up 13–18% quarter over quarter; NAND Flash up 10–15% | A forecast for supplier contract pricing, not a forecast of the same percentage increase in retail phones. |
TrendForce’s July update also said the rate of component-price growth was moderating from earlier levels as affordability limits and weaker demand constrained buyers. Suppliers were still prioritizing AI-related uses, and LPDRAM supply remained tight. The update expected smartphone brands to raise retail prices while procurement activity in mid-range and entry-level segments stayed subdued. This is why “prices are rising” needs a date and a measure rather than being treated as a permanent rate.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why availability can change even when a phone’s price does not
A company may hold a launch price steady but receive fewer memory allocations. It can then ship fewer units, favor one storage tier, or prioritize regions and retailers with stronger commitments. A store running out of a particular configuration does not prove that all global supply has disappeared; local inventory depends on contracts, logistics, taxes, currency, promotions and the seller’s stock position.
The reverse is also possible. An older model may remain available after a new generation launches because a retailer is discounting existing inventory. That phone can look like a bargain even while the newest model has a higher price or reduced memory configuration. Availability therefore reflects both component supply and ordinary product-cycle decisions.
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What buyers should check before purchasing
Global forecasts cannot determine the exact price or stock level in your country. Use them as context, then compare the phones and offers actually available to you.
- Record the complete configuration. Note RAM, built-in storage, processor, network version and whether the listing is new, refurbished or used. “The same model” can have different memory tiers.
- Compare total price, not just the headline. Include sales tax, delivery, required accessories, carrier financing charges and any storage tier premium.
- Check local stock and delivery promises. A global shortage does not establish a particular store’s inventory. Confirm the seller’s stated dispatch date and return policy.
- Separate a discount from a specification change. An older phone may be cheaper because it is being cleared, while a current phone may cost more because its memory allocation or other components became more expensive.
- Decide how much memory you actually need. More RAM can help with heavy multitasking and demanding games; more storage matters for large apps, photos and video. Paying for a higher tier is not automatically better if your usage does not require it.
- Verify expansion claims in the model’s specifications. Do not assume a memory card can add internal RAM. If removable storage is important, confirm the exact model and regional variant supports it.
What “the AI bill” claim means—and what it does not
Francisco Jeronimo, IDC’s vice president for worldwide client devices, characterized the situation this way: “The memory tsunami that we warned about is now hitting the market in full, and consumers are starting to pay the AI bill. The components that make AI possible are the same ones in short supply, and their cost is being passed straight through to the shelf. Average selling prices are up 27.6% this year and will keep rising well into 2027. The era of the cheap smartphone has ended.”
That is an executive characterization tied to IDC’s forecast. It highlights how competition for memory capacity can affect consumer devices, but it is not a neutral finding that every buyer will face the same increase or that low-cost phones have universally ended. Actual prices vary by market, model, promotion and retailer, and forecasts can change as supply and demand change.
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Likely consumer responses
If new phones become less affordable, IDC expects some people to keep their current handset longer or move to used devices. Others may choose an older generation, a lower storage tier or a model from a different segment. Those responses can reduce demand for new units, which in turn may encourage manufacturers to trim production or revise their model ranges.
For an individual purchase, the practical question is not whether a global forecast guarantees a price rise. It is whether the specific phone offers the RAM, storage, support period and availability you need at a price you can accept today, and whether an alternative configuration gives better value without relying on an assumed future discount.
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