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Short answer: Smartphones use two costly memory types—mobile DRAM (usually LPDDR) for active tasks and NAND flash for built-in storage. When memory supply tightens or contract prices rise, manufacturers can raise prices, accept smaller margins, ship less RAM or storage at the same price, change their model mix, or reduce production. The impact is usually greatest on budget phones, where margins and buyers’ budgets are both narrow.
Memory is only one part of a phone’s cost. Taxes, currency movements, displays, processors, cameras, software support, carrier deals and retailer inventory also affect the price you see. Global forecasts therefore explain the pressure on the market; they do not predict the exact price or stock level of a particular phone in your country.
Which memory parts are in a smartphone?
Mobile DRAM is the phone’s working memory
Mobile DRAM, including LPDDR generations, temporarily holds the operating system, open apps and data that the processor is using. More DRAM can let a phone keep more apps active and can support demanding camera, gaming and on-device AI workloads. It is normally soldered into the phone’s main board. A typical owner cannot replace it the way a desktop user might add a memory module.
NAND flash is built-in storage
NAND flash stores the operating system, applications, photos, video and downloaded files when the phone is turned off. Storage capacity is advertised in gigabytes, such as 128GB or 256GB, although the usable amount is lower after system software and formatting. NAND is also generally soldered in place, so choosing a larger configuration at purchase is usually the practical way to obtain more internal storage.
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Some phones may accept a removable memory card, but that does not upgrade internal RAM and does not necessarily replace the performance or reliability of built-in NAND. Check the exact model specification before assuming a card slot exists or that apps can be moved to it.
How a memory shortage reaches the phone price
Capacity is being pulled toward higher-margin products
Memory manufacturers serve phones, computers, servers and other devices. IDC reported in December 2025 that suppliers were directing cleanroom space and capital expenditure toward higher-margin enterprise components, including high-bandwidth memory (HBM) used with AI accelerators. That allocation can leave less conventional DRAM capacity for consumer products, including phone LPDDR. Data-center and AI demand is an important source of competition for capacity, but it is not the sole explanation for every change in smartphone pricing.
Contract prices change the bill of materials
Phone makers negotiate memory supply contracts and buy additional components on the spot market when necessary. If those inputs become more expensive, the phone’s bill of materials rises. The company then chooses how much of the increase to absorb and how much to pass to customers. A long-term supply agreement, a large purchasing volume or a close supplier relationship can delay or soften the effect; a smaller buyer with less leverage has fewer options.
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The same mechanism applies when memory is available but a manufacturer cannot secure enough of the preferred grade or capacity. A launch may be delayed, production may be limited to the configurations that can be supplied, or a company may prioritize one region or product tier over another.
How large is memory’s share of a phone’s cost?
Different analysts use different models and phone definitions, so their percentages should not be combined as if they measured the same device. These are estimates and forecasts, not a universal markup applied to every handset.
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| Source and date | Device or measure | Memory cost estimate or forecast | What the figure means |
|---|---|---|---|
| IDC, December 2025 | Mid-range smartphone | 15–20% of bill of materials | Estimated share of component cost for that price tier |
| IDC, December 2025 | High-end flagship | About 10–15% of bill of materials | Estimated share for a premium device, whose other components are more expensive |
| TrendForce, February 11, 2026 | Mainstream phone with 8GB RAM and 256GB storage | Historically 10–15%; estimated 30–40% in its 2026 market scenario | TrendForce’s estimate for that stated configuration and market moment |
A higher percentage of the bill of materials does not automatically produce the same percentage increase at retail. Retail prices also include assembly, research and development, software, distribution, taxes, warranty costs, marketing and the manufacturer’s margin.
What phone makers can do when memory costs rise
Pass part of the cost to buyers
The most visible response is a higher launch price or a smaller discount. A price increase can be applied to one configuration, a whole product family or a later refresh. It may not appear immediately if the company is selling inventory purchased under an older contract.
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A manufacturer can keep the sticker price unchanged and accept less profit per phone. This is easier for a company with a strong balance sheet, premium customers or other profitable product lines. It is harder for a low-cost model that already operates on a thin margin.
Change the RAM or storage configuration
A new model can launch with less memory at a similar price. IDC gave a possible example of moving from 12GB of RAM and 256GB of storage to 8GB and 128GB. That example describes a strategy, not a universal observed change across all brands. A specification reduction can preserve a target price while shifting the cost burden to the buyer who needs a higher tier.
Alter the model mix
Companies can emphasize models and configurations that use less scarce memory, postpone an entry-level variant, or discontinue a low-volume option. The result may be fewer choices rather than a dramatic price increase on every phone.
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Cut production
If the economics no longer work, a maker can reduce output. TrendForce estimated on February 11, 2026 that global smartphone production could fall 10% to about 1.135 billion units in 2026, with a bear-case contraction of 15% or more. This is a production estimate and scenario, not a final annual result.
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Why budget phones face the greatest pressure
Entry-level and lower-mid-range phones have less room to absorb a memory increase. Their margins are thin, and a small absolute cost increase represents a larger share of the selling price. Their buyers are also more price-sensitive, so raising the price can reduce demand quickly. IDC and TrendForce therefore describe budget-heavy portfolios as more exposed to memory inflation and supply constraints.
That exposure does not mean every inexpensive phone will disappear. A company might keep a low price by reducing storage, use an older platform, cut promotional spending, or accept a lower margin. It might instead delay a replacement model or offer fewer configurations.
Scale and supplier relationships matter
IDC says larger companies with stronger supplier relationships and volume commitments are generally better positioned to secure allocations. TrendForce has assessed Samsung as potentially benefiting from vertical integration and Apple from a premium product mix and greater customer price tolerance. It has identified Xiaomi and Transsion, whose portfolios are more heavily weighted toward entry-level devices, as more exposed. These are analyst assessments and forecasts, not guaranteed outcomes for any company or model.
What the 2026 forecasts actually measure
Several widely quoted 2026 numbers describe different things. Treating them as one prediction creates a misleading picture.
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| Publisher and date | Metric | Forecast | How to interpret it |
|---|---|---|---|
| IDC, February 26, 2026 | Worldwide smartphone shipments | Down 12.9% in 2026 | Units shipped through distribution channels, not the price of each phone |
| TrendForce, February 11, 2026 | Global smartphone production | Down 10% to about 1.135 billion units; bear case down 15% or more | Manufacturing output estimate and scenario |
| IDC, later 2026 forecast | Worldwide smartphone shipments | Down 16.7% to just over 1 billion units | A later forecast that changed the earlier IDC outlook |
| IDC, later 2026 forecast | Worldwide smartphone average selling price | Up 27.6% to $581 | An average across the market, not a 27.6% increase on every shelf price |
| TrendForce, July 3, 2026 forecast for Q3 | Conventional DRAM contract prices | Up 13–18% quarter over quarter | A component-contract forecast, not a phone-retail forecast |
| TrendForce, July 3, 2026 forecast for Q3 | NAND Flash contract prices | Up 10–15% quarter over quarter | A component-contract forecast, not a phone-retail forecast |
TrendForce’s July update said the Q3 increases were moderating from earlier rates because weaker demand and affordability limits were constraining buyers. It nevertheless expected suppliers to keep prioritizing AI-related uses, LPDDR supply to remain tight, phone brands to raise retail prices, and procurement activity in the mid-range and entry-level segments to stay subdued. A dated forecast is more informative than saying prices rise at a permanent fixed rate.
What this means for phone availability
Fewer configurations can be in stock
A retailer may receive the 128GB version while the 256GB version is delayed, or a manufacturer may allocate more units to a higher-margin market. A global shortage signal does not establish what a particular store has today.
Launches and replacements can move
When a company cannot secure enough memory at an acceptable cost, it may postpone a launch, reduce initial quantities or keep an older model in the line longer. Availability can therefore change even when the model’s advertised price has not.
Older models may become the value option
An older phone discounted by a retailer can offer more RAM or storage for less than a new generation whose component costs are higher. Check the software-support period, battery condition and warranty before treating an older model as a bargain.
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- Compare total purchase cost. Include sales tax, delivery, required accessories, carrier financing charges and any promotional conditions. A lower list price is not always a lower final price.
- Record both RAM and internal storage. Do not compare a 12GB/256GB phone with an 8GB/128GB phone as if they were equivalent configurations.
- Check the exact model number. Regional variants can have different memory capacities, radios, software and storage options.
- Verify local stock and delivery timing. Global shipment or production forecasts cannot tell you whether a specific retailer has inventory.
- Separate new releases from discounted older phones. A previous-generation model may have a better memory specification at a lower price, but confirm its update policy and remaining warranty.
- Do not count a memory-card slot as extra RAM. If expandable storage matters, verify that the exact phone supports it and understand its limitations.
Why your country’s price may differ from the global trend
No country-specific realized pass-through from memory costs was established in the available market estimates. Local taxes, import duties, currency exchange rates, carrier subsidies, retailer promotions, financing and existing inventory can all delay or amplify a change. Two countries can therefore see different prices for the same phone, and a local sale can temporarily offset a higher component cost.
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Consumer behavior also feeds back into the market. If new phones become less affordable, people may keep their current devices longer or choose used and refurbished units. Lower demand can constrain a manufacturer’s ability to pass through every cost increase, even while scarce memory keeps pressure on the supply side.
What to expect next
Memory pricing will continue to depend on how quickly suppliers add capacity, how much enterprise and AI demand absorbs that capacity, and how willing consumers are to pay for new phones. The 2026 forecasts from IDC and TrendForce changed materially during the year, illustrating why shipment, production, component-price and average-selling-price figures must always be dated and labeled.
IDC Vice President for Worldwide Client Devices Francisco Jeronimo characterized the situation this way: “The memory tsunami that we warned about is now hitting the market in full, and consumers are starting to pay the AI bill. The components that make AI possible are the same ones in short supply, and their cost is being passed straight through to the shelf. Average selling prices are up 27.6% this year and will keep rising well into 2027. The era of the cheap smartphone has ended.” That is an executive’s characterization and forecast, not proof that every buyer or every region will see the same increase.
The practical conclusion is narrower: memory is a significant, sometimes double-digit share of smartphone component cost, and a constrained supply can force a combination of higher prices, reduced specifications, fewer models and lower production. When shopping, compare the complete price, the actual RAM and storage, the model’s age and your local availability rather than assuming a global percentage applies directly to one phone.
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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
