A storage chip shortage crisis ignited by AI is quietly driving up the prices of smartphones.
Dell’s Chief Operating Officer, Clark, admitted in a recent conference call: “We have never seen costs fluctuate at this speed before.”
Driven by a strong surge in global AI infrastructure development, the memory chip market is facing a severe supply-demand imbalance.
Several tech giants have collectively issued warnings, predicting a significant shortage of memory supply by 2026, making price pressures unavoidable.
AI Ignites a “Super Cycle”
The “Stargate” project is set to be the last straw that breaks the supply-demand balance.
In October 2025, OpenAI signed an agreement with Samsung and SK Hynix to secure a supply of up to 900,000 DRAM wafers per month—equivalent to 40% of global DRAM production.
Everyone watching the storage market anticipates the upcoming trend: contract DRAM prices surged171% after the announcement.
The AI boom has created an astonishing demand for high-bandwidth memory. Data centers and consumer electronics manufacturers are competing for the same basic resources, with the former bidding significantly higher.
Factories are shifting advanced DRAM capacity towards AI demands, as the bids from data centers areunmatched by consumer device manufacturers.
Supply Tightness and Price Surge
The storage chip market has completely shifted to a seller’s market.
A recent report from a US foreign investment firm indicates that memory costs have surged significantly in recent weeks, and the market is beginning to focus on whether smartphone brands will raise prices in 2026.
For example, Samsung’s LPDDR4X saw price increases in March, April, and October of this year, rising from an original quote of $6 to$25, a threefold increase.
The more advanced LPDDR5 has experienced similar increases this year, even pausing quotes altogether in November.
Market research firm Counterpoint Research predicts that by the second quarter of 2026, storage chip prices are expected to rise by approximately50% from current levels.
Smartphone Industry Under Pressure
Price Increases and Reduced Specifications are almost a foregone conclusion for Chinese smartphones in 2026.
Xiaomi President Lu Weibing stated, “The rise in storage costs is far beyond expectations and will continue to worsen.” Lei Jun also lamented, “The increase in memory is just too much.”
Wang Zizhu warned during a live broadcast that smartphone prices may further increase in 2026, “because when the supply chain faces a surge in memory prices, it will definitely balance this cost fluctuation through price increases or reduced specifications.”
Foreign investment firms reviewed the memory price cycles of 2017 and 2021, noting that smartphone brands passed on costs by raising end-user prices, thus predicting that the average global smartphone price may rise again in 2026.
Varying Strategies Among Manufacturers
In the face of this storm, the responses of tech giantsare vastly different, creating two distinct camps.
Sony stockpiled sufficient memory for the PlayStation 5 before prices soared. According to industry insiders, its inventory is enough to maintain stable console prices for the coming months.
Apple also secured supplies in advance, and its profit margins are sufficient to absorb cost increases that could crush low-margin businesses.
Lenovo has gone even further. According to Bloomberg, its memory inventory is about50% higher than normal levels, enough to last until 2026.
In contrast,Microsoft finds itself in a passive position. Industry analysts believe that the Xbox console may have toraise prices again—the company already raised prices earlier this year.
Samsung, SK Hynix, and Micron have shifted their production lines to HBM, a specialized high-bandwidth memory for AI accelerator chips, where profits are far higher than consumer-grade DDR5.
The shortage of storage chips is no longer a cyclical fluctuation but astructural shift under the AI revolution.
As 2026 approaches, consumers may need to pay more for smartphones or accept adjustments in specifications.
The smartphone market may enter a new phase ofprice increases and reduced specifications.