AI Boom Pushes Up Memory Costs, Threatening Cheap Smartphones

Sub-$100 smartphones are rapidly disappearing as surging memory costs make budget devices increasingly difficult to manufacture, according to IDC and industry analysts cited in the report.

Global shipments of phones priced below $100 fell nearly 60% year over year in the second quarter of 2026. China has seen an especially sharp shift, with Xiaomi’s share of shipments in the segment dropping from 27.7% in the first half of 2025 to 11.2% a year later.

Manufacturers are responding by reducing cheap models and focusing on higher-margin devices. Xiaomi and Oppo have both seen significant increases in average selling prices since 2023.

Analysts expect prices to remain elevated even if the memory shortage improves. Lower-cost phones may become increasingly difficult for consumers to find.

Related Tweet:

Sub-$100 smartphones becoming a rarity as AI memory prices soar https://t.co/iTYWySyFVD

— CNBC (@CNBC) September 11, 2026

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tippinsightsTIPP Staff