The insatiable demand for extra generative AI is spiking costs in laptop components, which may roll into pricier smartphones subsequent 12 months.
Years of cryptocurrency mining have elevated the costs of laptop components equivalent to graphics playing cards. So it isn’t stunning to see this development proceed with the rise of generative AI and its unrelenting want for extra computing energy.
What the patron tech world did not anticipate was a rise in demand for reminiscence, which has led to a decent market in client RAM for PCs in latest months. That ripple impact has prolonged past computing to influence the smartphone trade as effectively.
Moderately than the reminiscence sticks that slot into PC motherboards, smartphones use specialised RAM that is miniaturized to slot in handsets. Nonetheless, with reminiscence manufacturing shifting to fulfill the demand for large orders from knowledge facilities that deal with AI workloads, the gen AI rush is driving up costs for all sorts of RAM.
And this is not only a momentary mismatch in provide and demand — it may very well be a everlasting shift on this planet’s silicon wafer capability, in response to a mid-December report from the market intelligence agency Worldwide Knowledge Company (IDC).
Telephone-makers weathered the financial turmoil of tariffs by absorbing prices, however analysts predict it will be a distinct story in 2026 — and price will increase will doubtless be handed on to customers.
Do not miss any of our unbiased tech content material and lab-based opinions. Add CNET as a most well-liked Google supply.
“Within the case of the upcoming reminiscence disaster, that is one thing that may hit the market onerous, particularly to [phone-makers] enjoying within the low finish the place margins are extraordinarily tight,” stated Nabila Popal, senior analysis director at market intelligence agency Worldwide Knowledge Company (IDC). “These distributors can have nearly no selection however to go the elevated price to customers.”
How way more costly will telephones get subsequent 12 months? The low finish of low-cost telephones will doubtless see the most important fluctuations. Popal expects costs on this class to spike by a minimum of 5-10%. That is as a result of reminiscence makes up 15-20% of the fabric prices of cheaper telephones, which is a better proportion than that of pricier premium telephones (round 10-15%), in response to the latest IDC report.
In response, phone-makers will shift their mixture of merchandise towards the upper finish, promoting dearer handsets which have greater margins, Popal predicts. This reminiscence disaster has been disruptive sufficient to change IDC’s prediction of common telephone costs in 2026, swinging from a slight decline to a 2% enhance. Whereas that is prone to result in a decline in models shipped subsequent 12 months, elevated costs are anticipated to drive the general smartphone market to a file excessive worth of $578.9 billion, in response to an IDC report launched in early December.
Subsequent 12 months’s successors to telephones just like the iPhone 17 Professional Max and Samsung Galaxy S25 Extremely might not get extra RAM for AI performance as a result of scarcity.
As reminiscence costs spike, telephones may drop their RAM specs
Except for elevating handset costs, the reminiscence scarcity may lead phone-makers to vary course from increasing the quantity of RAM of their product configurations to sustaining and even lowering it.
Within the third quarter of 2025, over 51% of smartphones shipped had a minimum of 8GB of RAM or extra, stated Francisco Jeronimo, vp of shopper units at IDC; that quantity rises to almost 93% for handsets priced at $400 or above.
“In 2026, entry-level and mid-range smartphones might revert to 4GB RAM configurations to protect value in price-sensitive markets,” Jeronimo stated.
The 8-GB threshold is critical, because it’s roughly thought-about a baseline requirement for operating on-device generative AI options, equivalent to Galaxy AI and picture options on the Google Pixel sequence. Whereas telephones can and do run hybrid and totally cloud-based gen AI providers, equivalent to ChatGPT, sending requests to and from knowledge facilities ends in lag time earlier than folks obtain solutions to their queries, and so they aren’t usable when underground or past cell service.
The reminiscence scarcity has doubtless stalled any plans to pack essentially the most premium telephones with reminiscence to spice up AI efficiency, with 24GB of RAM or greater configurations scrapped for the foreseeable future, Jeronimo predicts. The higher restrict on top-tier handsets is prone to be 16GB, and “Professional” variants might even revert right down to 12GB to guard margins and keep away from value hikes.
The extent to which these impacts are detrimental will depend on the period of the reminiscence scarcity. However the shock to client wallets will doubtless make them wait longer to exchange their telephones, particularly in components of the world the place handsets are purchased wholesale. In markets just like the US, the place telephones are extra generally purchased on installment plans lasting two to 3 years, folks will not see as a lot of a success to their month-to-month payments.