Global RAM shortage may trigger worst smartphone shipment slump in over 10 years, IDC warns

An AI-fuelled surge in demand for computers and data-centre infrastructure is now tightening global RAM supply and driving memory prices sharply higher, with direct consequences for the smartphone market. According to new projections from analyst firm IDC, global smartphone shipments could fall by 12.9% in 2026, which the firm says would be the steepest decline in more than a decade.

IDC had earlier reported that manufacturers shipped 1.26 billion smartphones in 2025. For 2026, it now expects volume to drop to around 1.12 billion units. The firm says this is not just a short-term disruption but a broader market reset.

Nabila Popal, senior research director at IDC’s Worldwide Quarterly Mobile Phone Tracker, said the memory squeeze is likely to reshape the long-term Total Addressable Market, alter the competitive vendor landscape, and change product mix across price segments. She added that pressure on component costs will push device prices up even as unit shipments fall.

IDC projects the average selling price of a smartphone will jump by 14% to a record $523 this year. Popal said smaller vendors are likely to face consolidation pressure, while low-end brands could record steeper shipment losses because they have less room to absorb higher component costs and weaker demand at elevated price points.

She also warned that the sub-$100 smartphone may become permanently uneconomical under current memory pricing, making it much harder for manufacturers to keep ultra-budget devices in market.

Regionally, IDC expects the Middle East and Africa to see shipments decline by more than 20% year-on-year. It also forecasts declines of 10.5% in China and 13.1% in Asia Pacific excluding Japan and China. The firm said it expects RAM pricing to begin stabilising around mid-2027.

Other analysts have also flagged a slowdown, though with less severe estimates. Counterpoint, for instance, projected a 2.6% dip in smartphone shipments last year.

Industry executives are echoing similar concerns. Earlier this year, Nothing co-founder and CEO Carl Pei said smartphone prices in 2026 are likely to increase as memory modules become significantly more expensive. He said brands are being forced to choose between major price hikes — in some cases 30% or more — and lower specifications, adding that the long-running strategy of offering more specs for less money is no longer sustainable in 2026.

Pei further noted that entry-level and mid-tier categories in some markets could contract by 20% or more, putting extra pressure on brands that historically relied on those segments for scale.