For the last few days, reports are coming that the prices of all devices using memory chips including smartphones and laptops are going to increase. Now a recent analysis has revealed that the biggest price hike is going to come in the smartphone and PC industries after 26 years. That means, if you want to buy a new smartphone or laptop in 2026, then the burden on your pocket is going to increase. The biggest reason behind this is the lack of memory chips. These days, even the biggest companies are facing shortage of chips, due to which the prices of devices are ready to skyrocket. In today’s explainer, we are going to tell you how the shortage of memory chips started and how the situation reached here.

Why did memory chips start becoming expensive?

In August this year, America had imposed tariffs on China. Due to this, imports of various things became expensive and due to uncertainties, new investments also came to a halt. After this, in early December, Micron, one of the world’s largest companies making data storage and computer memory components, said that it will not make chips for the consumer market and will keep its entire focus on making chips for AI data centers. After this, only two big companies remained in the market, Samsung and SK Hynix, which manufacture high-bandwidth memory (HBM) chips along with the consumer market. There are other companies in this field including Kingston, but they also depend on suppliers like Samsung and SK Hynix.

This is not the first time there has been a shortage

The shortage of memory chips is not being felt for the first time. If we look at the background, this industry has been full of ups and downs. Here, along with over supply, shortage of supply is also common. The supply of wafer glass required for making chips keeps increasing or decreasing depending on the demand etc. There was a shortage of memory chips during 2012-13 and after that the situation became normal. Then there was a shortage of supply in 2018-19, which was completed only in 2021-22. Now once again the demand for memory chips is increasing, but due to lack of supply the prices are skyrocketing.

How much role does AI play in this?

Most experts believe that the biggest reason behind the shortage of memory chips is AI. The trend of AI has increased in the last few years and AI companies are spending money like water to build data centers. In October, OpenAI joined hands with Samsung and SK Hynix to supply HBM for the data center. In view of this, Micron also decided to separate itself from the consumer RAM market and make chips solely for AI data centers. Actually, chip makers are also getting huge money and long contracts from AI companies. Due to this, chip making companies are also seeing an opportunity to fill their pockets and they are busy capitalizing on this opportunity without the worries of AI bubble.

How will this affect customers?

The shortage of memory chips will not only affect customers buying premium phones. Due to this, smartphones, tabs, laptops, TVs, gaming consoles and other IoT devices will also be affected and customers will have to pay higher prices for them. Many companies have decided to reduce the RAM in their phones to prevent the price from increasing. Apart from this, businesses dependent on servers, cloud services and data processing will also have to face its impact. Now the costs of companies will increase, due to which the pace of ongoing work in the field of software upgrades, digital services and cyber security will slow down.

Where is the highest demand for memory chips at this time?

AI data centers are currently consuming the most resources. A high-powered GPU requires 1TB of high-bandwidth memory (HBM), and every data center contains thousands of GPUs. From this, it can be estimated how many memory chips are required by AI companies at present. Also, AI companies require big servers for their services. Apart from this, new equipment for 5G/6G, edge computing, IoT devices, autonomous vehicles and medical devices as well as memory chips for computers and smartphones are needed.

What are companies doing to deal with this?

Recently, Google fired one of its officers because he could not ensure the supply of chips. Now the company is looking for a person who can get it chips in Korea. At the same time, Taiwanese company Asus is considering making DRAM itself. The company can start its new plant next year. Even Samsung has not been able to keep itself away from this effect. The cost of the upcoming Galaxy S26 series has increased for the company and it wants to avoid launching its phones at an expensive price. To keep the price low, Samsung has also compromised on some features. Xiaomi has started making its products expensive due to the increased price due to the chip. Other companies have also indicated that their upcoming products will be launched with increased prices.

When will the situation become normal?

This situation will continue for the next 2-3 years. It has been said in many reports that the situation is not likely to become normal before 2028. Now some companies have planned to set up new plants, but it may take a long time to get output from them. Till then customers will have no other option except buying expensive devices.

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Smartphone prices have been increasing for some time and now less affordable phones are being launched. The same trend is going to remain next year also and it will become difficult to buy a smartphone. Counter Point Research’s report says that less affordable and mid-range smartphones will be launched in 2026, due to which people will have to pay more to buy new phones. Let us know why companies are stopping launching low cost phones.

Smartphone sales will decline in 2026

Counterpoint has estimated that smartphone sales will decline in 2026 and global shipments may decline by 2.1 percent. The biggest reason behind this is the expensiveness of the components. Due to expensive components, the cost of making smartphones is increasing for companies and this will have a direct impact on the price of the phone, which the customers will have to pay.

Cheap models are most affected

The biggest impact of cost increase will be on models priced below US $ 200 (about Rs 18,000). Counter Point says that the cost of making these phones has increased by 20-30 percent since the beginning of this year. In such a situation, now companies are left with no other option except increasing their prices. If the price is increased, customers from the budget segment will not buy them. Therefore, companies are now holding back from launching cheap models.

Expensive phones also affected

Along with budget, mid-range and premium phones have also been affected by rising costs and now it is becoming 15-20 percent more expensive for companies to make them. The main reason for the increase in cost here is the shortage and skyrocketing prices of memory chips. Due to AI, the production of consumer memory chips has reduced and their prices may increase by 40 percent by the second half of 2026. Due to this, the cost of companies may increase further by 8-15 percent.

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