How are PC, smartphone makers handling memory chip shortage?

The global consumer electronics industry is adjusting to a tightening memory-chip supply that is reshaping pricing, product strategy and competitive dynamics across smartphones and personal computers.

Demand from artificial-intelligence infrastructure has surged so rapidly that memory components — especially DRAM and NAND — are increasingly being diverted toward data-centre applications.

The shift is now rippling through the supply chain, forcing device makers to raise prices, redesign products and secure long-term contracts in an effort to protect margins.

Industry data suggests the pressure could persist well beyond the current year and alter the structure of several consumer hardware markets.

Smartphone volumes to decline and prices likely to surge

The most immediate impact is expected in the smartphone sector.

A report from International Data Corporation (IDC) forecasts global smartphone shipments will fall 12.9% in 2026, the “lowest annual shipment volume in more than a decade.”

At the same time, average selling prices are projected to climb 14% to a record $523 as component costs rise.

IDC senior researcher Nabila Popal said, “While memory prices are projected to stabilize by mid-2027, they are unlikely to return to previous level,” adding that the sub-$100 smartphone segment will become “permanently uneconomical.”

Budget Android devices are particularly exposed because they operate on thin margins.

According to IDC vice president Francisco Jeronimo, rising component costs leave manufacturers with “no choice but to pass the costs on to end users.”

The change could push smaller vendors out of the market while strengthening the position of larger brands such as Apple and Samsung.

Samsung has already raised prices on its latest Galaxy S26 models.

The base version launched at $899 in the United States, a 4.7% increase, while the S26 Plus rose 10% to $1,099.

The company previously warned of a worsening chip shortage driven by the AI boom, as memory producers prioritize higher-margin data-centre chips such as high-bandwidth memory.

Apple is reportedly expected to unveil iPhone 17e, a new version of its lower-cost smartphone, next week, potentially offering insight into whether Apple will increase price of its products or not.

Apple chief executive Tim Cook also warned that memory chip prices would “increase sharply,” though he declined to say whether device prices would rise.

The shortage extends beyond phones. Reports indicate it may delay new gaming consoles like Playstation 6 and Meta's new headset, and has already led to price increases for devices.

AI data centres reshape the supply chain

The core driver of the shortage is the rapid build-out of artificial-intelligence infrastructure.

Technology companies including Microsoft, Amazon, Google and OpenAI are purchasing large volumes of memory chips for data-centre computing clusters.

Chipmakers are responding by allocating more production capacity toward high-performance components used in AI servers.

That shift is reducing availability for consumer electronics manufacturers and pushing up prices across the board.

Market tracker TrendForce expects conventional DRAM contract prices to surge by 90% to 95% in the first quarter compared with late 2025.

The effects are visible across the hardware ecosystem.

Laptop, desktop and gaming device manufacturers are now facing the same cost pressures that smartphone vendors encountered earlier.

PC makers raise prices and secure supply

Personal-computer manufacturers are responding with a mix of pricing adjustments and supply-chain planning.

Dell has already increased prices on several business notebooks and desktops equipped with 32GB of memory, with hikes ranging from $130 to $230 depending on configuration.

The company also raised server prices to stabilize margins as “input costs are rapidly changing.”

Despite the pressure, Dell signaled confidence in managing supply, noting it has sufficient inventory to meet revenue guidance and benefited from improved operating margins driven by storage products and proprietary technology.

HP reported an even sharper shift in cost structure.

Memory now accounts for 35% of the materials required to build a PC, up from roughly 15%–18% previously.

Chief financial officer Karen Parkhill said memory costs increased roughly 100% sequentially from one quarter to the next and are expected to continue rising.

The company has responded by signing long-term supply agreements, qualifying new suppliers and building strategic inventory positions.

Interim chief executive Bruce Broussard told investors the firm also “expanded lower-cost sourcing across our commodity basket, lowering logistics costs with agile end-to-end planning processes,” while using internal AI tools to improve supply-chain operations.

Manufacturers are therefore balancing two priorities: protecting margins and maintaining market share.

In some cases, companies are delaying price increases for consumer PCs to stay competitive, even as component costs climb.