Memory prices surge, Goldman Sachs lowers global smartphone sales forecast, low- and mid-end segments unable to hold out first.

The price increase of memory chips, this "double-edged sword," is piercing the bubble of recovery in the global smartphone market.

According to information from the Chasing Winds Trading Desk, a recent research report released by the Goldman Sachs analyst team led by Allen Chang on January 25 warns that: due to rising memory component prices and surging costs, the smartphone market’s previously expected rebound in shipment volumes by 2026 will no longer happen.

Goldman Sachs has directly lowered its 2026 global smartphone shipment forecast by 6%, expecting only 1.19 billion units for the year—which means the market will not grow at all that year, but will shrink 6% compared to the previous year.

The logic behind this judgment is very straightforward: memory chips are too expensive, leading to a surge in smartphones’ BOM (bill of materials) costs. For price-sensitive entry-level models, this is almost a fatal blow.

The price hike in memory “eats up” entry-level market demand

Why does the price increase in memory have such a large impact on sales?

Goldman Sachs did the math: in entry-level models, memory chips account for a very high proportion of the BOM cost. When memory gets more expensive, manufacturers must either raise prices or absorb losses.

In emerging markets, consumers are extremely sensitive to price. Once entry-level phones (under $200) raise prices to cover costs, demand vanishes instantly. Goldman Sachs predicts that between 2025 and 2027, global entry-level phone sales will continue to shrink at a compound annual growth rate (CAGR) of -4%. By 2027, their market share will fall from 44% in 2024 to 40%.

This creates a classic situation of "falling volume, rising prices": although global shipments for 2026 and 2027 are revised down to -6% and +2% respectively, due to passively higher average selling prices (ASP) and changes in product mix, the total market value (TAM) of global smartphones can maintain slight growth (estimated to grow 2% to $581 billion in 2026).

High-end and Foldables: The Rich Man’s Game Remains Unaffected

Unlike the bleak entry-level market, the high-end market (priced above $600) is almost immune to this wave of cost increases.

The reason is simple: for iPhones or Android flagships costing over $600, the memory chip cost is a relatively small proportion of the total price, and the target customer group is not sensitive to price. Goldman Sachs expects sales of high-end models to maintain a 2% CAGR between 2025 and 2027, and by 2027, high-end phones will contribute 70% of global smartphone revenue.

Foldable smartphones are another bright spot of countertrend growth. New releases like Huawei Mate X7 and Moto Razr are attracting users with new form factors and more mature supply chains. Goldman Sachs predicts that global penetration of foldable phones will reach 3.8% (about 45 million units) in 2026, rising further to 6.1% (74 million units) by 2027.

Computing Hardware: AI Servers Skyrocket, PC Recovery Stalls

Away from smartphones, the hardware market tells a different story.

AI training servers remain a growth engine. Goldman Sachs predicts that shipments of AI training servers will soar 56% in 2025, and continue to grow 67% in 2026. In comparison, the recovery of general servers is much milder (projected to grow 8% in 2026).

The personal computer (PC) market is similarly affected as smartphones. Goldman Sachs expects global PC shipments to fall 5% in 2026, with only a 3% rebound in 2027. This suggests that amid a lack of compelling reasons to upgrade, high-cost hardware is suppressing overall consumer demand for new devices.

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