AI-driven memory chip shortage to push smartphone prices higher in 2026: Counterpoint

A shortage of memory chips driven by surging demand from artificial intelligence players is likely to push smartphone prices higher in 2026 and lead to a decline in global shipments, according to a note released by Counterpoint Research on Tuesday.

Global smartphone shipments are expected to fall 2.1 percent in 2026, Counterpoint said, a sharp downgrade from its earlier forecast of flat-to-positive growth. Shipments are an indicator of demand and track the number of devices sent to sales channels such as retail stores, rather than actual consumer sales.

At the same time, the average selling price of smartphones is projected to rise 6.9 percent year-on-year in 2026, nearly double Counterpoint’s previous estimate of a 3.6 percent increase. The firm attributed the shift to specific chip shortages and bottlenecks across the semiconductor supply chain that are driving up component costs.

The ongoing global build-out of data centres has significantly increased demand for AI systems powered by Nvidia, which relies on components supplied by memory chipmakers SK Hynix and Samsung Electronics, the two largest suppliers in the segment. The surge in AI infrastructure spending has tightened availability of dynamic random-access memory, or DRAM, a critical component for both AI data centres and smartphones.

DRAM prices have risen sharply this year as demand continues to outstrip supply. Counterpoint said the impact is already being felt across smartphone price bands. For low-end smartphones priced below $200, the bill of materials cost has increased by 20 percent to 30 percent since the start of the year. The mid- and high-end segments have seen material costs rise by 10 percent to 15 percent.

Counterpoint warned that memory prices could climb a further 40 percent through the second quarter of 2026, potentially pushing bill-of-materials costs 8 percent to over 15 percent higher than current elevated levels. The firm said manufacturers are likely to pass on at least part of these higher costs to consumers, driving up average selling prices.

“Apple and Samsung are best positioned to weather the next few quarters,” said MS Hwang, research director at Counterpoint. “But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins.” Hwang added that the pressure will be felt most acutely by Chinese smartphone makers operating in the mid-to-lower price segments.

To offset rising costs, Counterpoint said some smartphone makers may downgrade components such as camera modules, displays, and audio systems, or reuse older parts. Manufacturers are also expected to push consumers toward higher-priced models to protect margins.