At this point I don’t think it will catch you by surprise, but if so, to summarize: we are living a DRAM memory crisis unprecedented and that, together with the active war conflicts and the situation with AI and data centersare factors that are turning the smartphone industry into a really complicated scenario.
The most expensive component of a mobile. Carl Pei, co-founder and CEO of Nothing, has been warning about this for months, and his latest words summarize very well how the situation currently stands. And just as affirms In one of his latest tweets, “memory is now the most expensive component of a smartphone. More than the processor, more than the screen, and can represent more than 50% of the total hardware cost.”
pei ya I had anticipated this situation Last January, a few months after we began to see how some manufacturers were modifying the prices of their memory offering, rising up to 300% in some segments.
Data center hunger. The large data centers of Microsoft, Amazon, Google and Meta need the same type of memory that phones have (DRAM and NAND Flash) to power their artificial intelligence models. The difference is that hyperscalers (basically Big Tech) pay more, they buy more and reserve production capacity years in advance.
According to IDCthe three largest memory manufacturers in the world (Samsung, SK Hynix and Micron) have redirected their production capacity towards the high-performance memory (HBM) demanded by Nvidia GPUs, leaving less supply available for mobile phones. And as the technology analysis firm points out, each wafer destined for an HBM stack for an AI chip is a wafer that will not go to an LPDDR5X module for a mid-range smartphone.
By the end of 2025, SK Hynix was already directing 30% of its wafers to HBM; Micron went further and last December said goodbye to Cruciala brand aimed at the final consumer, redirecting all its production to the business market.
What the numbers say. The shortage has a direct reflection on prices. Gartner calculate that the combined cost of DRAM and SSD will rise by 130% before the end of 2026, making smartphones 13% more expensive on average compared to 2025. TrendForce situates Global phone production around 1,135 million units this year, a 10% drop compared to 2025. IDC comes to estimate a decline of almost 13% in global smartphone shipments, which would be the largest in more than a decade. And if that were not enough, the average price of a smartphone has already reached $550 in 2026, a hundred dollars more than the previous year, according to share from Memeburn.
Who pays the price? Omdia esteem that phones under $100 will drop 31% in sales this year. The entry and mid-range segments, where brands such as Xiaomi, Oppo and others usually operate, they are the hardest hitbecause their margins are very narrow and they cannot absorb cost increases without passing them on to the consumer.
Nabila Popal, research director at IDC, claimed that “the era of the ultra-cheap smartphone is over.”
The Nothing case as a thermometer. Pei illustrates it with your own product. The memory costs of the Nothing Phone (4a) doubled between the time the company decided to manufacture it and the day it went on sale. And they have doubled again since then. In the life cycle of a single product, the cost of memory has multiplied by four, and it is an example that more brands are living in silence.
What changes for the buyer. Pei warns that this year’s sales season, like Black Friday, will not have the discounts to which the consumer was accustomed. Since February, new phones have been on the market with prices up to $100 more expensive than their predecessors. In fact, according to Pei, in India, models above 30,000 rupees (about 272 euros at the exchange rate) have risen more than 7,000 rupees compared to the previous generation. And the forecast is that prices will continue to rise, at least until 2027.
For Nothing, it is an opportunity. Pei has been defending for years that design and user experience matter more than specifications on paper, and now the market is proving them right the hard way. “2026 is the year the spec race ends,” he said in January. It is a delicate topic, because if we think about it coldly, we get less for the same price or more than what we already paid, so it can be very easily interpreted as a way of making the user not take into account the technical specifications sheet and let themselves be carried away by what the brand puts in front of their eyes.
And now what. The relief in prices will not come until manufacturers have greater production capacity, something that analysts They don’t wait before 2028. Until then, we have two options: either buy now, before prices rise further, or hold on with the device we have. And it seems that update cycles are going to lengthen, and in that context, the second-hand and reconditioned market may gain appeal.
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