There are increasing concerns that the prices of electronic devices including TVs, gaming consoles, cars, cameras, and smartphones are set to rise significantly. According to a new report from Counterpoint Research, the average selling price (ASP) of smartphones is expected to increase by 6.9 per cent in 2026, nearly double previous forecasts.
Surprisingly, this price hike is not driven by new taxes but by a severe global shortage of a critical component: RAM and AI and data centres are main reasons behind this shortage.
What is RAM?
RAM stands for Random Access Memory. It serves as your device's short-term memory, allowing laptops, smartphones, and even modern cars to store data temporarily for immediate use.
For example, when you run software, play a game, or browse multiple tabs, that data is stored in the RAM. This allows your device to access information almost instantly without having to reload everything from the much slower main storage drive (SSD or HDD).
Why AI data centers are causing this shortage
The primary driver behind this shortage is the explosion of Generative AI. To train and run complex AI models, tech giants like Google, Microsoft, and Nvidia require massive data centers.
These centers use enormous amounts of DRAM as fast, temporary memory to process vast datasets in real time. Because AI companies are willing to pay a premium for this high-end memory, chipmakers are shifting their production away from consumer electronics to satisfy this high-margin demand.
A market controlled by three giants
The global RAM market is dominated by just three companies, Samsung, SK Hynix, and Micron, who together control approximately 93 per cent of the total market share.
The supply strain was recently exacerbated by a major industry shift:
- Micron exits consumer market: Micron recently announced that it will shutter its Crucial brand (focused on consumer memory and storage) by February 2026.
- Prioritising enterprise: Like its competitors, Micron is reallocating its resources to support strategic AI and data center customers, effectively "choking" the supply available for smartphones, PCs, and other consumer gadgets.
How this impacts you
The shift in production is creating a "dual bind". While manufacturers struggle to make enough high-end chips for the AI race, they are producing fewer traditional memory products for everyday devices.
| Impact Category |
Expected Change in 2026
|
| Smartphone Price Increase |
6.9% rise in average selling price.
|
| Component Costs (BoM) |
A jump of 10% to 25% in total manufacturing costs.
|
| Budget Device Vulnerability |
Brands like Honor, Oppo, and Xiaomi are most at risk due to lower profit margins.
|
| Spec Downgrades |
Manufacturers may resort to reusing old components or reducing RAM (e.g., dropping from 16GB to 8GB).
|
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