The DRAM supply situation is predicted to worsen for consumer electronics next year, with multiple industry watchers believing that a grim future for budget handsets could materialize in 2027. Thanks to AI centers gobbling up existing DRAM shipments, which could account for more than 60 percent in the near future, phone makers will have a negligible supply to work with, forcing them to have little option but to raise prices.
DRAM prices have surged by as much as 700% since 2022, with three memory makers controlling 90% of the total supply
Even with a class-action lawsuit aimed directly at Samsung, SK hynix, and Micron, the DRAM price situation won’t be controlled, with a report from MyDrivers stating that, by the end of 2026, more than half of the memory supply will already be used in AI computing. Naturally, this supply disparity means smartphone companies, including Apple, will not just have to deal with higher prices but also tackle the need to obtain adequate supply.
The report mentions that budget handsets in the 1,500 yuan bracket, or $220 range, could cease to exist in 2027, as experts believe that storage costs will now account for 60 percent of a smartphone’s price, making it next to impossible for companies to generate any margin without resorting to massive hikes. Research firm IDC estimates that smartphone shipments will fall to their lowest since 2013, with PC shipments also witnessing a nosedive.
Chinese DRAM suppliers can offer some relief, but price adjustments are far from an achievable reality
With Samsung, SK hynix, and Micron controlling 90 percent of the world’s DRAM supply, the only light at the end of the tunnel comes in the form of China’s CXMT and YMTC. While supplying local chips to companies like Huawei, Xiaomi, OPPO, and others will be no issue for these manufacturers, other firms have to navigate a ton of geopolitical hurdles to bring them into the fold.
As Apple persists with its lobbying attempts with the Trump Administration in the hopes that its supply woes can be addressed, teaming up with CXMT and YMTC won’t mean its customers will obtain DDR or LPDDR memory at lower prices, with analyst Ming-Chi Kuo stating that this tag-team will only reduce supply risk.
Looking at the current scenario, smartphone manufacturers’ priorities would be to secure as much supply as possible, as opposed to price negotiation. Unfortunately, reducing supply risk won’t resolve the pricing conundrum, which is why budget smartphones will either completely vanish or become significantly more expensive, forcing consumers to fork over a premium for a reduced number of features.
Also, for those believing that this is a short-term affair, Lenovo wants you to get comfortable with these prices, saying that this is the ‘new normal.’
News Source: MyDrivers
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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