The smartphone industry is facing a critical memory shortage, and it's hitting consumers hard. With headlines announcing Micron's exit from the consumer memory market and potential delays in NAND deliveries from Samsung and SanDisk, the pressure is on for smartphone manufacturers.
Here's the catch: According to Calian Press, referencing TrendForce's Senior Research VP Avril Wu, the industry norm for smartphone memory inventories is a comfortable 8-10 weeks. But in a shocking turn, current stocks have plummeted to less than four weeks, leaving manufacturers in a bind.
When inventories dip this low, manufacturers are forced to buy at high prices to keep production lines running. Calian's report reveals that low-priced inventory may only last until early 2026, forcing companies to accept price hikes to restock. But here's where it gets controversial—the impact is not evenly distributed across the market.
A spokesperson from Coosea Group, makers of koobee smartphones, revealed to Calian that mid- to low-end smartphone chips, including some 4G and 5G models, still depend on DDR4x or lower, with DDR5 being unsupported. This segment is expected to stick with DDR4 for the next three years. However, these devices are caught in a supply-demand crunch, resulting in dramatic price increases.
The demand for AI servers (CSP) is devouring wafer capacity for HBM and enterprise DDR5, and with memory production constrained, manufacturers are favoring high-margin HBM, further tightening the supply of other memory types. DRAM prices have skyrocketed by over 400% this year, and Flash prices have nearly tripled. Coosea, as reported by Calian, witnessed a staggering rise in 4GB DDR4x chip prices, from $7 at the beginning of the year to over $30 by mid-November, a 4-5x increase. Similarly, 64GB eMMC prices surged from $3.2 to over $8 during the same period.
Samsung and SK hynix plan to continue DDR4 production into 2026 before phasing it out, according to South Korea's Maeil Business Newspaper. This situation has significant implications for budget smartphones.
TrendForce predicts that the DRAM price surge will initially impact entry-level smartphones. The spike in smartphone memory costs in 2025 is primarily attributed to rising DRAM prices. DRAM contract prices in Q4 are projected to increase by more than 75% YoY, and since memory typically accounts for 10-15% of the total BOM cost, this has resulted in an approximate 8-10% rise in unit costs in 2025.
While TrendForce forecasts a modest 1.6% YoY increase in global smartphone production for 2025, they warn that persistent memory supply challenges could trigger further downward adjustments. Coosea, as mentioned by Calian, is adapting memory configurations to prioritize the core smartphone experience. This could mean a shift from 12GB + 512GB configurations to more cost-effective 8GB + 256GB versions, indicating a potential reversal of the recent trend of rapidly expanding smartphone storage.
And this is the part most people miss—price increases are unavoidable. Xiaomi President Lu Weibing has confirmed that the company has secured memory supply for 2026 but warned that shortages could lead to higher smartphone prices, as product costs will reflect the increased component expenses, as reported by the Economic Daily News.
In response, Chinese memory manufacturers are stepping up their game. GigaDevice is gearing up for mass production of LPDDR4X and developing LPDDR5X, while Montage Technology is increasing the adoption of its DDR5 memory interface chips (RAM). TWSC has also announced plans for private placement to expand SSD and memory production.
The memory crunch is not limited to smartphones. Dell and Lenovo are increasing PC prices, and SanDisk and Samsung's reported NAND delivery delays are causing price spikes for Transcend. This crisis is far from over, and it's sparking intense debates about the future of the industry. What do you think? Is the industry headed for a major shake-up, or will it adapt and emerge stronger?
