Smartphone buyers might soon feel the pinch in their wallets: a growing shortage of memory chips is pushing up component costs, and manufacturers are warning that retail prices could rise in response.
✅ What’s happening?
- Major smartphone brands like Xiaomi have publicly stated that the current cycle of memory chip shortages could lead to higher phone prices in 2026.
- According to reports, chipmakers such as Samsung have increased the prices of memory chips by large margins (up to ~60% in some cases) because demand from data-centres, especially for AI, is taking priority.
- In India, budget smartphones have already seen a price rise of nearly 10%, and analysts warn that another ~50% increase in memory-chip costs could push device prices up by more than 10% next year.
🔍 Why is this happening?
- The surge in demand for AI infrastructure and data-centres is redirecting memory-chip production toward high-end chips such as high-bandwidth memory (HBM) and LPDDR types. This leaves less manufacturing capacity for “regular” memory used in smartphones and laptops. The Economic Times
- Memory-chip suppliers are deliberately holding back capacity expansion to avoid price collapse (a repeat of past cycles) — meaning supply is tighter than many expected.
- For smartphones especially in budget segments, memory chips account for a significant share of cost — sometimes 10-15% of the device cost. When these chips get more expensive, the effect ripples to retail pricing. mint
🎯 What this means for smartphone buyers
- Expect higher prices: Devices that were stable in pricing might now cost more in 2026 as manufacturers pass on the increased component cost.
- Act sooner? If you’re planning a purchase, you might consider buying earlier rather than waiting too long — delay might mean increased price.
- Check value options: With higher production costs, budget phones may still offer value, but features might shift (e.g., less memory, fewer extras) to keep costs down.
- Global & India-specific effects: In India and similar markets, price sensitivity is high; even a 5-10% rise may push many buyers to delay or switch brands. mint
🧭 What to watch out for
- Whether the price increases are temporary (until supply catches up) or structural (a new baseline cost for memory).
- If manufacturers choose to absorb costs for some models (especially flagship ones) while raising prices primarily for budget/mid-tier models.
- How this influences features per rupee/value proposition in smartphones: will manufacturers trade off specs to keep price stable?
- Region-wise: India’s market is very price-sensitive; even small increases could change purchasing behaviour significantly.
- The role of alternative technologies or suppliers stepping in to alleviate memory supply pressure, which could stabilize prices.
🧮 Bottom line
For smartphone buyers, especially in budget and mid-tier segments, the memory chip shortage is a real and imminent factor that could drive up prices in 2026. If you were planning a purchase, it’s worth factoring in the potential cost increase — either by buying sooner or adjusting your budget.
