Memory shortage could cause the biggest smartphone shipments dip in over a decade

Source: TechCrunch

Overview

A rise in the need for computers and data centers for AI is causing a massive shortage of RAM, resulting in prices of memory shooting up in multiples. Analyst firm IDC predicts that this will cause smartphone shipments to plummet by 12.9 % this year, marking the biggest dip in more than a decade.

Shipment Forecast

• IDC reported that manufacturers shipped 1.26 billion devices in 2025.
• The firm now expects the volume to dip to 1.12 billion this year.

Market Impact

“The memory crisis will cause more than a temporary decline; it marks a structural reset of the entire market, fundamentally reshaping long‑term TAM (Total Addressable Market), the vendor landscape, and the product mix,” — Nabila Popal, senior research director, IDC Worldwide Quarterly Mobile Phone Tracker.

Image Credit: IDC

Pricing and Consolidation

• Because of the memory shortage, the average selling price (ASP) of a smartphone is expected to rise by 14 %, reaching a record $523 this year.
• IDC anticipates consolidation as smaller players exit and low‑end vendors face sharp shipment declines amid supply constraints and lower demand at higher price points.

Regional Outlook

• Middle East and Africa: shipments expected to drop over 20 % YoY.
• China: shipments projected to decline 10.5 % YoY.
• Asia Pacific (excluding Japan and China): shipments projected to decline 13.1 % YoY.

RAM Price Outlook

IDC expects RAM prices to stabilize by mid‑2027.

Other Analyst Views

• Counterpoint Research also noted a decline in smartphone shipments, but forecast a smaller dip of 2.6 %.
• Carl Pei, co‑founder and CEO of Nothing, warned that memory module cost increases will force brands to either raise prices by 30 % or more or downgrade specifications. He added that entry‑ and mid‑tier segments could shrink by 20 % or more, challenging brands that have historically dominated these markets.