Yahoo Finance | AI's Chip Appetite Is Squeezing The Global Smartphone Market— Analysts Warn Of 31% Shipment Slump Ahead

The international smartphone market is bracing for a potential 31% slump in shipments over the coming year, a consequence of escalating memory chip costs fueled by the demand from AI hyperscalers, according to Jeffries. The firm noted a 70% quarter-on-quarter price surge in memory chips, driven by server-making companies’ increasing demand. The prices are projected to rise by an additional 50% in Q2 2026.

As memory costs continue to soar due to the strong demand for AI-driven technologies, smartphone production costs are increasing. Memory prices, which rose 40%-50% in late 2025, are projected to climb further in early 2026, potentially increasing premium device costs by over $150. Earlier this year, analysts had already predicted the steepest decline in the global smartphone market in 2026, with memory shortages driving up device prices. The global PC and smartphone markets were expected to shrink by 11% and 13%, respectively, according to a February report from the International Data Corporation, while Counterpoint Research projected a 12% year-on-year decline in global smartphone shipments in 2026, calling it the "sharpest decline on record."

Qualcomm is expected to face near-term headwinds due to market share loss at key smartphone customer accounts, as noted by analyst James Schneider. He said soaring memory prices could reduce smartphone demand, impacting the company’s biggest business segment. Meanwhile, a January report suggested that Apple Inc. is prioritizing production and shipment of its premium iPhone models for 2026, delaying the standard version due to supply chain constraints. The strategy aims to optimize resources, offset rising memory chip costs, and manage manufacturing challenges linked to its upcoming foldable iPhone.

Read more: https://finance.yahoo.com/sectors/technology/articles/ais-chip-appetite-squeezing-global-113108327.html

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Smartphone Mkt to Decline 13% in '26, Largest Drop Ever Due to Memory Shortage

https://www.idc.com/resource-center/press-releases/wwsmartphoneforecast4q25/

#HackerNews #SmartphoneMarket #Decline #MemoryShortage #TechNews #2026 #IDCReport

Despite AI challenges, Apple's iPhone 17 shows resilience in the smartphone market. IDC report reveals strategic ecosystem strength and sustained market share. How does Apple navigate tech innovation amid setbacks? Dive into the details of their latest smartphone strategy. #iPhone17 #AppleIntelligence #TechStrategy #SmartphoneMarket

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