A global shortage of memory chips driven by artificial intelligence is sending smartphone prices to record levels and threatening weaker manufacturers, according to a new report CNN cited from the International Data Corporation.
IDC said AI-driven demand for data centers has diverted memory supplies away from consumer electronics. The firm projects average smartphone prices will rise 14 percent this year to a record $523.
Devices priced under $100 are expected to disappear. Global phone shipments are forecast to fall 12.9 percent in 2026 to 1.12 billion units, the weakest level in over a decade.
BREAKING NEWS: Smartphone shipments set for biggest-ever decline in 2026
— Business Tech Africa (@BusinessTech_SA) February 27, 2026
The International Data Corporation (IDC) due to surging memory chip prices inflating device costs.
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Major memory suppliers have shifted production to AI-focused chips, tightening supply for phones that rely on DRAM. Prices for both DRAM and high bandwidth memory nearly doubled in early 2026, according to Counterpoint Research.
IDC warned the disruption is permanent. Smaller Android manufacturers face the greatest risk, while companies like Apple and Samsung are better positioned to gain market share.
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