Memory shortages could crash smartphone market in 2026

The ongoing shortage of memory chips threatens to cause a sharp decline in smartphone shipments as early as this year. According to the latest forecast from analytics firm TrendForce, the global smartphone market could shrink by 10%, resulting in about 1.135 billion units shipped across the calendar year.

There’s also a more pessimistic scenario on the table. In TrendForce’s so-called “bear case,” shipments could fall as much as 15%, slashing global smartphone deliveries to roughly 1.061 billion units. For comparison, 2025-though hardly a breakout year-ended on a relatively positive note with the market growing about 2%, and shipment volumes estimated between 1.24 and 1.26 billion devices.

Regardless of which scenario plays out, TrendForce is confident that average smartphone prices will rise in 2026. Previously, memory components accounted for roughly 10-15% of a mid-range phone’s production cost, but analysts now estimate that share has surged to 30-40%. This will inevitably force some manufacturers to cut back on production.

The impact of rising memory prices will vary by brand. Samsung is positioned best thanks to its vertical integration and role as a major memory supplier. Apple also seems well insulated, as its customer base tends to be less sensitive to price hikes, which works in its favor.

In contrast, most Chinese manufacturers will face tougher challenges. Their customers are generally more price-conscious, especially for brands like Xiaomi that heavily rely on budget and entry-level models. These companies are the most vulnerable to cost fluctuations and rising component prices.