Memory chip shortages will cause the global smartphone market to shrink by 13% in 2026, and the era of cheap phones may be coming to an end.

```

The global smartphone market is facing its most severe crisis in decades.

Market research firm IDC has released its latest forecast: due to an unprecedented shortage of memory chips, global smartphone shipments in 2026 will decline by 12.9% year-on-year, far exceeding the drop seen during the tariff crisis and the impact of the Covid pandemic.

According to IDC's forecast, global smartphone shipments in 2026 will fall to about 1.1 billion units, lower than the previous year's 1.26 billion units, erasing the market scale accumulated over many years. IDC Senior Research Director Nabila Popal commented:

The tariff crisis and pandemic crisis pale in comparison.

Nabila Popal expects the situation will not begin to ease until at least mid-2027.

The massive demand for advanced memory chips driven by artificial intelligence continues to strain global supply; for smartphone manufacturers, the pressure on cost structure is narrowing the survival space for entry-level models, profoundly reshaping the market landscape. IDC bluntly states, "The era of cheap smartphones is over."

Pressure on demand side, shipment forecasts heavily revised downward

The impact of the memory shortage on the industry is more severe than expected.

IDC data shows that in 2025, global shipments of smartphones priced under $100 will be about 170 million units. But now, the market for smartphones in this price range is barely sustainable.

The simultaneous rise in costs for DRAM and NAND chips is squeezing the already thin profit margins of many Android brands. In the entry-level market, which is more price sensitive, memory costs make up a higher proportion of the total material cost.

Leading Chinese manufacturers like Xiaomi and Oppo, as they compete for domestic market share and bolster international competitiveness, are investing heavily in flagship features, making their entry-level product lines particularly vulnerable under current cost pressures.

Facing sustained cost impact, smartphone makers are broadly adopting measures such as compressing product specifications, phasing out low-margin entry-level models, and guiding consumers toward higher price segments.

Xiaomi and Lenovo Group have both issued warnings that retail prices for consumers may be subject to upward adjustments. In contrast, high-end products like Apple's iPhone series are expected to show stronger resilience during this crisis.

Supply gap extends to 2027, industry pricing logic may change permanently

As the world’s largest mobile processor supplier, Qualcomm CEO Cristiano Amon said after this week’s earnings release:

We just want more memory. The issue is not only price, but availability itself. I believe the supply situation for memory will determine the overall scale of the phone market.

IDC predicts the memory shortage will continue until 2027. More importantly, even if supply is eventually replenished, the industry is unlikely to return to its previous low price structure. Nabila Popal said:

Even after the crisis ends, we do not expect memory prices to return to 2025 levels.

This means the shock is not just a cyclical supply-demand imbalance, but likely to fundamentally reshape the scale, average price, and competitive landscape of the smartphone market.

Risk Warning and DisclaimerThe market involves risk, investment needs caution. This article does not constitute personal investment advice, nor does it take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views or conclusions in this article fit their particular circumstances. Investments based on this article are at your own risk. ```