The Bill of Materials (BoM) for smartphones is estimated to reach up to 25 percent in 2026 as the DRAM shortage is causing all sorts of trouble for multiple industries. Android device makers were already traversing through thin ice when generating margins, with titans like Apple and Samsung grabbing the lion’s share of smartphone profits. Companies like ASUS and others were forced to fight for scraps, with the situation becoming so dire that the Taiwanese firm is reportedly bowing out of the smartphone market, with no new ROG or Zenfone releases expected this year.
In annual smartphone shipments, ASUS was never considered a top player, so it is understandable that, in the middle of a memory crisis, the company has had to make some tough calls
This isn’t the first time that ASUS has been reported to bow out of the smartphone business, as the company was said to discontinue its Zenfone range of handsets in 2023. Fortunately, ASUS returned quickly with a statement, denying these claims, but on the latest occasion, there is some truth to it. According to Economic Daily News and DigiTimes, ASUS has communicated with relevant outlets and business partners that it will not launch any new ROG or Zenfone models in 2026.
Thankfully, the Taiwanese firm has clarified that its smartphone business will continue after-sales services, and current models aren’t going to be affected. Due to the DRAM shortage, a single 12GB LPDDR5X RAM chip now costs $70, making it a monumental increase compared to the $25-$29 figure that companies were paying previously. Additionally, given that chipsets like the Snapdragon 8 Elite Gen 6 Pro are expected to be significantly more expensive than the standard Snapdragon 8 Elite Gen 6, ASUS will be paying a substantial amount for these parts without any notable traction in the smartphone market.
The only way for ASUS to remain afloat in the smartphone market while shipping its newer ROG and Zenfone models with ‘top of the line’ components is if it upcharges customers the premium paid for DRAM and 2nm chipsets. Unfortunately, the ruthless smartphone industry has more than a few choices to offer, and given that companies like Apple, Samsung, Xiaomi, and others operate on a scale unattainable by ASUS, the better business decision would be to quietly bid farewell to the smartphone market.
ASUS announced a price hike for certain product combinations, which will take effect from January 5. There was a sliver of relief as a report mentioned that the company would enter the DRAM business to tackle the shortages. Unfortunately, the PC components manufacturer has denied these claims. Also, if there wasn’t already enough bad news, memory suppliers have cherry-picked customers that are now being prioritized for DRAM shipments, and sadly, ASUS isn’t on the list, prompting it to make this decision.
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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