Smartphone prices to rise in 2026 due to AI-fueled chip shortage
An Apple Store logo is seen reflected on the glass exterior of a Samsung flagship store in Shanghai, China, on Monday, October 20, 2025.
Wang Gang | Feature China | Future Publishing | Getty Images
A memory chip shortage fueled by AI players could lead to a price hike and decline in shipments for smartphones in 2026, Counterpoint Research said in a note Tuesday.
According to Counterpoint, smartphone shipments could fall by 2.1% in 2026; whereas, despite the previous steady-positive growth outlook.
Shipments do not equal sales, but are a measure of demand because they track the number of devices shipped to sales channels such as stores.
Meanwhile, Counterpoint said that the average selling price of smartphones could increase by 6.9% on an annual basis in 2026, compared to the previous estimate of a 3.6% increase.
This is due to certain chip shortages and bottlenecks in the semiconductor supply chain, which are pushing up part prices.
The continuous expansion of data centers around the world has increased the demand for developed systems. NvidiaIt uses components designed by SK Hynix and Samsung; these are the two largest suppliers of memory chips.
But a particular component used in AI data centers, called dynamic random access memory, or DRAM, is also critical for smartphones. DRAM prices have increased this year as demand exceeds supply.
Counterpoint said the bill of materials cost for low-end smartphones priced under $200 has increased 20% to 30% since the beginning of the year. The bill of materials is the cost of producing a single smartphone.
Material costs were seen to increase by 10% to 15% in the mid- and high-end smartphone segment.
“Memory prices could rise another 40% by the second quarter of 2026, resulting in BoM costs rising 8% to 15% above current highs,” Counterpoint said.
Increased prices of components may be passed on to consumers, resulting in an increase in the average selling price.
“Apple “And Samsung is best positioned to get through the next few quarters,” Counterpoint research director MS Hwang said in the note. “But it will be difficult for others who don’t have as much leeway to manage market share and profit margins.”
This “will be especially true for Chinese smartphone manufacturers at the mid-to-lower end of the market,” Hwang said.
Counterpoint said some companies may downgrade components such as camera modules, displays and even audio and reuse older components. Smartphone players will likely try to encourage consumers to buy their higher-priced devices.
