AI driven RAM shortage may make sub-Rs 9,000 phones ‘permanently uneconomical’, says IDC

IDC says the AI fuelled 'RAMageddon' could cut smartphone shipments by 12.9% this year, marking the first segment decline in over a decade.

2 min readNew DelhiUpdated: Feb 28, 2026 09:13 AM IST

AI-driven demand for memory chips is pushing smartphone prices to record highs. (AI generated)

AI is already triggering a severe RAM shortage, pushing up the prices of many modern electronic devices. Now, this so-called “RAMageddon” could also lead to a record-breaking drop in smartphone sales.

According to analyst firm International Data Corporation (IDC), the memory shortage will cause smartphone shipments to decline by a whopping 12.9%, marking the “lowest annual shipment volume in more than a decade.”

For years, the smartphone industry has been recording steady growth, with phone makers churning out new models every month or so. However, the memory shortage caused by AI has caused the average selling price for a smartphone to hit new highs, with IDC now predicting a 14% increase.

“While memory prices are projected to stabilize by mid-2027, they are unlikely to return to previous level,” says Nabila Popal, a senior researcher at IDC.

Also Read | Nvidia expects gaming chips shortage to last until year-end

She added that phones under $100 (approx Rs 9,000) will be “permanently uneconomical” and that the RAM shortage may cause smaller players to exit the segment as they face shipment declines at higher prices than before.

In the Middle East and Africa, this will cause smartphone shipments to drop by 20% year-over-year, while in china and the Asia Pacific region (excluding Japan) will see a decline of 10.5% and 13.1% respectively.

In 2025, Counterpoint had predicted that there would be a decline in smartphone shipments, but that dip was said to be jsut 2.6%.

Story continues below this ad

Last month, Nothing CEO Carl Pei had warned that as smartphone component prices increase, brands may be forced to increase smartphone prices by around 30% or more in some cases, or downgrade the hardware specifications. He went on to say that the “more specs for less money” model, which a lot of phone makers follow, was no longer sustainable in 2026.

“As a result, some markets, particularly entry and mid-tier segments, are likely to shrink by 20% or more, and brands that have historically dominated these segments will struggle,” Pei added.

Loading Recommendations...

Mar 09: Latest News

Live Blog