The global DRAM shortage will significantly impact the smartphone market in 2026. According to IDC, global sales are expected to decline by 13 percent. Instead of 1.26 billion devices shipped in 2025, only 1.1 billion smartphones are projected for 2026. Particularly low-cost Android models are under pressure. Apple, on the other hand, is considered relatively resilient, even though the company cannot completely avoid higher costs.
DRAM is a key component of every smartphone. Without RAM, neither apps nor operating systems nor AI functions work. However, this very memory is becoming scarce. The bottleneck is not primarily caused by smartphone manufacturers themselves, but by the rapidly growing demand in the AI sector.
Companies operating data centers are purchasing large quantities of high-bandwidth memory (HBM) for AI servers. Memory manufacturers are prioritizing these high-margin HBM products. This is leading to less capacity available for traditional DRAM used in consumer devices, resulting in rising prices and increasing supply pressure.
DRAM shortage leads to a 13 percent drop in sales
IDC expects global memory supplies to be depleted by next year, putting smartphone manufacturers in a difficult position. There is not enough memory available to meet production demand. DRAM prices have already risen significantly (via Bloomberg).
According to IDC's forecast, only 1.1 billion smartphones will be shipped in 2026. In 2025, that number was 1.26 billion. This represents a decline of approximately 13 percent within a single year.
IDC speaks of an "unprecedented crisis" for the smartphone market. Nabila Popal, Senior Research Director at IDC, puts the situation into perspective. In her assessment, even tariffs and the pandemic crisis seem mild in comparison. The market will undergo a massive transformation by the end of this crisis. Market size, average selling prices, and the competitive landscape will all be affected. IDC does not expect any improvement before mid-2027.
AI boom exacerbates storage crisis
The DRAM shortage is directly related to the strong demand for AI infrastructure. Companies are investing heavily in data centers and therefore require high-bandwidth memory. This memory technology is being prioritized in production because it promises higher margins.
Due to limited production capacity, traditional DRAM for smartphones is receiving less priority. This further tightens the supply for device manufacturers. The increased demand from the AI sector is thus shifting the market dynamics within the memory industry.
Cheap Android smartphones are under particular pressure
Manufacturers of budget Android smartphones are particularly hard hit. Profit margins in this segment are traditionally low, making it difficult to offset rising DRAM costs.
When memory prices rise, manufacturers must either increase device prices or cut corners on features and specifications. Both options intensify competition in the entry-level and mid-range segments. This could shift the market further towards higher-priced smartphones.
IDC predicts that even after a potential resolution of the DRAM shortage, memory prices will not return to their 2025 levels. This would mean higher average prices in the smartphone market in the long term.
Why Apple is better positioned
Apple is in a better position compared to many Android manufacturers. The company focuses on premium devices with higher sales prices and stronger profit margins. These margins provide the flexibility to absorb rising DRAM costs, at least in the short term.
Apple also has a strong supply chain and long-term relationships with suppliers. This allows the company to secure available memory shipments more easily than smaller or lower-margin providers.
However, the situation is not without consequences for Apple either. Reports indicate that Apple is currently paying Samsung twice as much for LPDDR5X memory chips, which are needed for the production of the iPhone 17 models. This demonstrates how tight the market is.
During the earnings press conference in January, Apple CEO Tim Cook stated that the increased memory prices had only a minimal impact on Apple's gross margin in the Christmas quarter of 2025. However, the company anticipates a somewhat stronger impact in the first calendar quarter of 2026.
Apple can absorb higher storage costs in the short term. Nevertheless, Apple remains affected by the general shortage.
Permanent market shift possible
The DRAM crisis could trigger long-term structural changes in the smartphone market. If memory prices remain persistently high, average smartphone selling prices will also rise. Manufacturers might be forced to focus more on premium models.
IDC expects the market situation to ease no earlier than mid-2027. Until then, competitive pressure is likely to increase. Suppliers with low margins will be particularly vulnerable, while financially strong companies will remain more stable.
DRAM shortage in 2026: Why the smartphone market is facing a turning point
DRAM shortages are becoming a key factor for the smartphone market in 2026. IDC forecasts a 13 percent decline in shipments and speaks of a crisis that could be bigger than previous burdens such as tariffs or the pandemic.
Budget Android smartphones are particularly vulnerable to rising storage prices. Apple, on the other hand, is in a comparatively stable position. High margins, strong supply chains, and a focus on premium devices give the company an advantage. Nevertheless, Apple will also have to bear higher costs, especially in 2026.
The coming years will likely show whether the market shifts permanently towards more expensive smartphones. One thing is clear: the DRAM shortage marks a profound turning point for the entire industry. (Image: Shutterstock / Gorodenkoff)
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