### Rising Demand for AI Memory Chips to Drive Smartphone Prices Up in 2026 The global smartphone market is facing significant challenges as a shortage of memory chips, driven by the booming demand from AI data centers, is expected to lead to a decline in smartphone shipments and an increase in prices. Counterpoint Research has revised its forecast, predicting a **2.1% decrease** in global smartphone shipments for 2026, a stark contrast to previous expectations of stable or positive growth. This downturn is attributed to sharply rising component costs, particularly for memory chips, which are essential for smartphone functionality. As manufacturers grapple with these increased costs, consumers can expect to see higher prices for smartphones, even for models with lower specifications. ### Breakdown of the Current Situation 1. **Decline in Shipments**: - Global smartphone shipments are projected to fall by **2.1%** in 2026 due to rising component costs, particularly memory chips [https://www.storyboard18.com/digital/ai-driven-memory-chip-shortage-to-push-smartphone-prices-higher-in-2026-counterpoint-86143.htm]. 2. **Price Increases**: - Smartphone prices are expected to rise by **6.9%** as manufacturers pass on the increased costs of memory chips to consumers [https://www.newsbytesapp.com/news/science/smartphone-prices-may-rise-6-9-in-2026-on-chip-shortage/story]. 3. **Impact of AI Demand**: - The surge in demand for memory chips from AI data centers is tightening supply for consumer electronics, leading to higher prices for smartphones [https://qazinform.com/news/global-ai-boom-may-push-up-smartphone-prices-next-year-797e12]. ### Supporting Evidence and Data - **Projected Shipment Decline**: - Counterpoint Research forecasts a **2.1%** decline in smartphone shipments for 2026, a significant downgrade from earlier predictions [https://seekingalpha.com/news/4531934-global-2026-smartphone-shipments-forecast-to-decline-due-to-memory-shortage-counterpoint]. - **Price Increase Forecast**: - The average selling price of smartphones is expected to rise by **6.9%** due to the memory chip shortage [https://cnbc.com/2025/12/16/smartphone-prices-to-rise-in-2026-due-to-ai-fueled-chip-shortage.html]. - **Market Dynamics**: - The ongoing AI boom is causing a global memory shortage, which is expected to affect not only flagship models but also mid-range and budget devices [https://indianexpress.com/article/technology/tech-news-technology/ai-boom-global-ram-memory-shortage-smartphone-price-increase-10422840]. ### Conclusion: Implications for Consumers and the Market In summary, the smartphone market is poised for a challenging year in 2026, characterized by **declining shipments and rising prices**. The key findings are as follows: 1. **Declining Shipments**: A **2.1%** drop in global smartphone shipments is anticipated due to rising costs [https://www.digit.in/news/general/memory-prices-are-going-up-16gb-ram-phones-may-be-the-first-to-go.html]. 2. **Increased Prices**: Consumers can expect smartphone prices to rise by **6.9%** as manufacturers adjust to higher memory costs [https://finance.yahoo.com/video/memory-chip-prices-could-pressure-144700650.html]. 3. **AI's Role**: The demand from AI data centers is a significant factor driving the memory chip shortage, which in turn affects smartphone pricing and availability [https://indianexpress.com/shorts/technology/ai-boom-global-ram-memory-shortage-smartphone-price-increase-10422840]. As the market adapts to these changes, consumers may find fewer budget options and higher prices for smartphones, impacting their purchasing decisions in the coming year.