Smartphone Prices Expected to Increase as Memory Costs Surge to 40% of Production Expenses

Rising memory chip prices are expected to significantly impact the global smartphone market in 2026, leading to lower shipments and higher device costs, according to TrendForce. The research firm forecasts a 10% decline in worldwide smartphone shipments, with total units reaching around 1.135 billion. In a more severe “bear-case scenario,” shipments could fall by up to 15%, totaling approximately 1.061 billion units. This follows modest growth in 2025, when shipments increased by about 2%, reaching between 1.24 and 1.26 billion units.

Average smartphone selling prices are also expected to rise in 2026. Memory components, which historically made up 10% to 15% of a smartphone’s bill of materials, now account for an estimated 30% to 40% due to soaring memory prices. This cost increase is likely to reduce production volumes for some manufacturers, particularly those targeting budget-conscious consumers.

The impact will vary across brands. Samsung may be better positioned to manage rising costs due to its vertical integration and role as a major memory supplier. Apple is also expected to remain relatively insulated, as its customer base typically tolerates higher prices. In contrast, many Chinese smartphone brands, including Xiaomi, may face greater challenges because of their focus on entry-level devices and price-sensitive markets. Overall, rising memory costs are poised to reshape smartphone pricing and shipments globally in 2026.