--- title: "The shortage of memory chips will lead to a 13% contraction in the global smartphone market by 2026, potentially marking the end of the era of cheap smartphones" description: "Affected by the AI-driven shortage of memory chips, IDC predicts that global smartphone shipments will decline by 12.9% year-on-year to approximately 1.1 billion units in 2026, a drop that surpasses t" type: "news" locale: "en" url: "https://longbridge.com/en/news/277097060.md" published_at: "2026-02-26T21:16:56.000Z" --- # The shortage of memory chips will lead to a 13% contraction in the global smartphone market by 2026, potentially marking the end of the era of cheap smartphones > Affected by the AI-driven shortage of memory chips, IDC predicts that global smartphone shipments will decline by 12.9% year-on-year to approximately 1.1 billion units in 2026, a drop that surpasses the impacts of the pandemic and tariff crisis. The rising costs of DRAM and NAND have severely squeezed the entry-level market, marking the end of the "sub-100 yuan smartphone era." IDC expects the shortage to continue until 2027, and even if supply recovers, prices are unlikely to return to 2025 levels The global smartphone market is facing the most severe crisis in decades. Market research firm IDC has released its latest forecast, stating that **due to an unprecedented shortage of memory chips, global smartphone shipments are expected to decline by 12.9% year-on-year in 2026, a drop far exceeding the declines during the tariff crisis and the impact of the COVID-19 pandemic.** **According to IDC's forecast, global smartphone shipments will fall to approximately 1.1 billion units in 2026, down from 1.26 billion units in the previous year, erasing years of accumulated market size.** IDC Senior Research Director Nabila Popal stated: > The tariff crisis and the pandemic crisis are trivial compared to this. **Nabila Popal expects the situation to ease at least until mid-2027.** The enormous demand for advanced memory from artificial intelligence continues to tighten global supply, putting pressure on the cost structure for smartphone manufacturers, and the survival space for entry-level models is rapidly shrinking, leading to a profound reshaping of the market landscape. **IDC bluntly stated that "the era of cheap smartphones is over."** ## Demand Pressure, Significant Downward Revision of Shipment Forecasts The intensity of the impact of the memory shortage on the industry has exceeded expectations. IDC data shows that in 2025, global shipments of smartphones priced below $100 are expected to be around 170 million units. However, the smartphone market in this price range is now struggling to survive. **The simultaneous rise in costs for DRAM and NAND chips is squeezing the already thin profit margins of many Android brands. In the price-sensitive entry-level market, the cost of memory accounts for a higher proportion of the total material costs.** Leading Chinese manufacturers like Xiaomi and Oppo are continuously investing heavily in flagship configurations while competing for domestic market share and enhancing international brand competitiveness, making their entry-level product lines particularly vulnerable under current cost pressures. In response to ongoing cost shocks, smartphone manufacturers are generally adopting measures such as compressing product specifications, phasing out low-margin entry-level models, and guiding consumers to migrate to higher price segments. **Both Xiaomi and Lenovo Group have issued warnings that there is upward pressure on retail prices for consumers.** In contrast, high-end smartphone products represented by Apple's iPhone series are expected to demonstrate greater resilience during this crisis. ## Supply Gap Extending to 2027, Industry Pricing Logic May Change Permanently As the world's largest mobile processor supplier, Qualcomm CEO Cristiano Amon stated after this week's earnings release: > We just hope to have more memory. The issue is not just price, but the availability of supply itself. I believe the supply situation of memory will determine the overall scale of the smartphone market. **IDC predicts that the memory shortage will continue until 2027. More critically, even if supply is eventually replenished, the likelihood of the industry returning to its previous low-price structure is extremely slim.** Nabila Popal stated: > Even if the crisis ends, we do not expect memory prices to fall back to 2025 levels This means that this round of impact is not only a cyclical supply-demand imbalance but may fundamentally reshape the scale, average price, and competitive landscape of the smartphone market ### Related Stocks - [562820.CN - Harvest CSI All Share Integrated Circuit ETF](https://longbridge.com/en/quote/562820.CN.md) - [SMH.US - VanEck Semiconductor ETF](https://longbridge.com/en/quote/SMH.US.md) - [SMH.UK - VanEck Vectors Semiconductor UCITS ETF Accum A USD](https://longbridge.com/en/quote/SMH.UK.md) - [SOXL.US - Direxion Semicon Bull 3X](https://longbridge.com/en/quote/SOXL.US.md) - [159558.CN - E Fund CSI Semiconductor Material & Equipment Thematic ETF](https://longbridge.com/en/quote/159558.CN.md) - [159995.CN - ChinaAMC Guozheng Semiconductor Chip ETF](https://longbridge.com/en/quote/159995.CN.md) - [XSD.US - SPDR S&P Semicon](https://longbridge.com/en/quote/XSD.US.md) - [588200.CN - Harvest SSE STAR Chip ETF](https://longbridge.com/en/quote/588200.CN.md) - [SOXX.US - iShares Semiconductor ETF](https://longbridge.com/en/quote/SOXX.US.md) - [512480.CN - GTJA Allianz CSI All Share Semiconductors & Semiconductor Equipment ETF](https://longbridge.com/en/quote/512480.CN.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | Nvidia To Rally More Than 53%? Here Are 10 Top Analyst Forecasts For Thursday | Top Wall Street analysts have revised their outlooks on several stocks. Notable changes include Piper Sandler lowering S | [Link](https://longbridge.com/en/news/277051168.md) | | Robotti Robert Has $516,000 Stock Position in Amkor Technology, Inc. $AMKR | Robotti Robert significantly reduced its stake in Amkor Technology, Inc. (NASDAQ:AMKR) by 90.5% in Q3, now holding 18,17 | [Link](https://longbridge.com/en/news/277032177.md) | | EXCLUSIVE-ASML says next-gen EUV tools ready to mass-produce chips, marking key shift for AI chip production | ASML Holding has announced that its next-generation High-NA EUV machines are ready for high-volume chip production, mark | [Link](https://longbridge.com/en/news/277104224.md) | | Top Sanmina-Sci Insiders Quietly Cash Out in Major Stock Moves | Sanmina-Sci (SANM) experienced significant insider selling on February 25, 2026, with CFO Jonathan P. Faust selling 10,0 | [Link](https://longbridge.com/en/news/276978729.md) | | PITAKA Debuts Aaron Button, Turning the Galaxy S26 Case Into a Programmable Control Interface | PITAKA has launched the Aaron Button, a three-button shortcut system integrated into the Galaxy S26 case, enhancing smar | [Link](https://longbridge.com/en/news/276959162.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.