Memory Chip Crisis Forces Global Smartphone Market Down 13%, Reports IDC
IDC forecasts a 13% decline in global smartphone shipments due to memory chip shortages affecting manufacturers worldwide.
The global smartphone market is projected to shrink sharply in 2026, with shipments falling by an estimated 12.9 per cent year‑on‑year — the steepest decline in more than a decade — largely due to an ongoing memory chip crisis, according to market research firm International Data Corporation (IDC). This downturn, attributed to persistent shortages and surging prices in DRAM and NAND memory chips, threatens to reshape the landscape of the mobile industry.
IDC’s latest forecast sees global smartphone shipments dropping to around 1.1 billion units in 2026, down from about 1.26 billion in 2025. The projected contraction effectively erases years of gradual growth as manufacturers contend with a constrained memory supply that has been drawn into AI infrastructure demand and related data‑centre applications.
Analysts highlight that the core driver of the slump is the reallocation of memory chip production toward higher‑margin products for artificial intelligence systems, which has tightened availability for consumer electronics. As a result, smartphone makers are either reducing specifications, dropping unprofitable entry‑level models, or shifting focus toward premium devices that can better absorb elevated component costs.
Also Read: Pakistan-Afghanistan Border Clashes Escalate Amid Heavy Casualties Reported
Market observers warn that entry‑level and low‑cost smartphones — particularly budget Android models — will bear the brunt of the contraction, as thinner profit margins make them vulnerable to rising DRAM and NAND prices. In contrast, established premium brands such as Apple and Samsung are expected to fare relatively better, thanks to stronger pricing power and broader access to scarce memory supplies.
As memory price inflation pushes smartphone average selling prices higher — forecast to reach a record level in 2026 — manufacturers may see consumer demand soften further, especially in price‑sensitive markets. IDC warns that even when supply conditions begin to improve by mid‑2027, memory costs are unlikely to fall back to previous levels, meaning the market could remain elevated for years.
The memory chip bottleneck has broader implications for the tech sector, potentially leading to consolidation among manufacturers and a reshaping of competitive dynamics. Analysts suggest that the slump could cement structural changes in the industry, ushering in an era marked by fewer low‑end offerings and an increased emphasis on higher‑value, feature‑rich smartphones.
Also Read: Trump Frees Columbia Student Hours After ICE Agents Posed as Police to Enter Campus
