DRAM Shortage Will Cause 'Seismic Shift' in Smartphone Market, But Apple Will Be Less Affected

[MacRumors]

Global memory scarcity will cause a 13 percent drop in smartphone sales in 2026, according to IDC (via Bloomberg). DRAM is in short supply because AI companies are buying huge quantities of high-bandwidth memory (HBM) for servers in data centers, and manufacturers are prioritizing HBM instead of the memory used in consumer devices.

IDC says that the global memory supply has been drained into next year, putting smartphone makers in a tough spot. Prices have spiked because there's not enough memory to meet production needs, which will cause a smartphone market "crisis like no other."

Smartphone makers are expected to ship 1.1 billion devices in 2026, down from 1.26 billion in 2025.

"The tariffs and pandemic crisis seem a joke compared to this," said IDC Senior Research Director Nabila Popal. "The smartphone market will witness a seismic shift by the time this crisis is over -- in size, average selling prices and competitive landscape. We don't expect the situation to ease up until mid-2027, at least."

Cheap Android smartphones will be impacted most heavily by increasing DRAM costs, but Apple is well-positioned to avoid major impact because it focuses on more expensive, premium devices. Apple has more profit margin to work with and is better able to secure available DRAM supply.

Apple is expected to absorb higher memory costs in the short term, but it isn't unaffected by the shortages. Just today, a report suggested Apple is paying Samsung twice as much for the LPDDR5X memory chips that it needs for producing iPhone 17 models.

During Apple's January earnings call, Apple CEO Tim Cook said that memory price increases had a "minimal impact" on Apple's gross margin during the 2025 holiday quarter, but the company is expecting a "bit more of an impact" during the first calendar quarter of 2026.

IDC says that even when the DRAM shortage is resolved, memory prices are not expected to return to 2025 levels, so there could be a permanent shift toward higher-priced smartphones.

Article Link: DRAM Shortage Will Cause 'Seismic Shift' in Smartphone Market, But Apple Will Be Less Affected

 

[S.B.G]

IDC says that even when the DRAM shortage is resolved, memory prices are not expected to return to 2025 levels, so there could be a permanent shift toward higher-priced smartphones.

As if they're not already overpriced. I'm keeping my current iPhone for as long as I can.

 

[jz0309]

Global memory scarcity will cause a 13 percent drop in smartphone sales in 2026, according to IDC (via Bloomberg). DRAM is in short supply because AI companies are buying huge quantities of high-bandwidth memory (HBM) for servers in data centers, and manufacturers are prioritizing HBM instead of the memory used in consumer devices.

IDC says that the global memory supply has been drained into next year, putting smartphone makers in a tough spot. Prices have spiked because there's not enough memory to meet production needs, which will cause a smartphone market "crisis like no other."

Smartphone makers are expected to ship 1.1 billion devices in 2026, down from 1.26 billion in 2025.

Cheap Android smartphones will be impacted most heavily by increasing DRAM costs, but Apple is well-positioned to avoid major impact because it focuses on more expensive, premium devices. Apple has more profit margin to work with and is better able to secure available DRAM supply.

Apple is expected to absorb higher memory costs in the short term, but it isn't unaffected by the shortages. Just today, a report suggested Apple is paying Samsung twice as much for the LPDDR5X memory chips that it needs for producing iPhone 17 models.

During Apple's January earnings call, Apple CEO Tim Cook said that memory price increases had a "minimal impact" on Apple's gross margin during the 2025 holiday quarter, but the company is expecting a "bit more of an impact" during the first calendar quarter of 2026.

IDC says that even when the DRAM shortage is resolved, memory prices are not expected to return to 2025 levels, so there could be a permanent shift toward higher-priced smartphones.

Article Link: DRAM Shortage Will Cause 'Seismic Shift' in Smartphone Market, But Apple Will Be Less Affected

this of course assumes that the AI bubble is not going to burst ... when/if that happens, the "seismic shift" will be interesting to watch ...

 

[PeterKeller]

Hmmm... upgrading is already expensive for not many new features. Maybe the iPhone average lifecycle will stretch.

 

[N0ughtsAndCr0sses]

Buy shares, Asia pacific. Haha

My portfolio is thru the roof, I tell ya, thru the roof. Hahahah

 

[Analog Kid]

In retrospect this was entirely predictable-- all the attention was on the AI processing hardware (Nvidia and the like) but less attention on the commodity chips. Wish I'd realized this earlier, missed a moneymaker...

vs

 

[G5isAlive]

this of course assumes that the AI bubble is not going to burst ... when/if that happens, the "seismic shift" will be interesting to watch ...

There will still be a time lag.. dram manufacturers retooled from the competitive commodity dram chips to the more lucrative AI chips, and that is what is causing the shortage. So even if AI bubble bursts, manufacturers will have to retool back and you can believe a) that will take time, and b) the cost will be pushed on to the customer (eventually us).

 

[NT1440]

There will still be a time lag.. dram manufacturers retooled from the competitive commodity dram chips to the more lucrative AI chips, and that is what is causing the shortage. So even if AI bubble bursts, manufacturers will have to retool back and you can believe a) that will take time, and b) the cost will be pushed on to the customer (eventually us).

Can you elaborate on this? I didn’t realize that the DRAM was any different. I thought they were just tied together in massive quantities.

 

[Analog Kid]

Actually, to put this in historic context:

I don't think Apple Stocks has a log chart, so it's hard to compare, but it's worth also noting how quickly the price reversed in the 2000 dot-com bust.

 

[Rychiar]

probably cus apples prices were already nightmarishly high

 

[Analog Kid]

There will still be a time lag.. dram manufacturers retooled from the competitive commodity dram chips to the more lucrative AI chips, and that is what is causing the shortage. So even if AI bubble bursts, manufacturers will have to retool back and you can believe a) that will take time, and b) the cost will be pushed on to the customer (eventually us).

Based on the article it wasn't a tradeoff between DRAM and GPUs it was a tradeoff between LPDDR (smartphone memory) and HBM (high bandwidth memory for data centers). Basically DRAM vs DRAM but with different interface configurations.

I think it's less about retooling and more about capacity reallocation which I think is shorter lead.

 

[JPack]

There goes the hope that iPhone 18 base will have 12GB.

 

[N0ughtsAndCr0sses]

In retrospect this was entirely predictable-- all the attention was on the AI processing hardware (Nvidia and the like) but less attention on the commodity chips. Wish I'd realized this earlier, missed a moneymaker...

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vs

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Wave is still high, brother, get on it. Haha

 

[Analog Kid]

Wave is still high, brother, get on it. Haha

Trust me, you don't want me to. My investment portfolio is generally a leading indicator of market reversals...

 

[jz0309]

There will still be a time lag.. dram manufacturers retooled from the competitive commodity dram chips to the more lucrative AI chips, and that is what is causing the shortage. So even if AI bubble bursts, manufacturers will have to retool back and you can believe a) that will take time, and b) the cost will be pushed on to the customer (eventually us).

I don't think any retooling is required between the various RAM products, but my point is/was, RAM manufacturers will see their pricing going down faster than it was going up ... there's a long history of RAM/NAND pricing going like a yoyo

 

[jeffehobbs]

Massively overcharging for RAM and storage for over two decades finally pays off!

 

[G5isAlive]

Can you elaborate on this? I didn’t realize that the DRAM was any different. I thought they were just tied together in massive quantities.

Based on the article it wasn't a tradeoff between DRAM and GPUs it was a tradeoff between LPDDR (smartphone memory) and HBM (high bandwidth memory for data centers). Basically DRAM vs DRAM but with different interface configurations.

I think it's less about retooling and more about capacity reallocation which I think is shorter lead.

Nope. It's also about retooling. a lead time is a lead time, which was my point. supply and demand of the different types. No comment about investigative reporting 🙂

AI Memory Boom Squeezes Legacy DRAM Supply, Pushing Prices Higher

High-bandwidth memory, or HBM, has become one of the most lucrative niches in semiconductors, benefiting from explosive demand linked to AI model training and inference.

seekingalpha.com

"As leading memory semiconductor manufacturers, Samsung Electronics Co. Ltd. (SSNLF), SK hynix Inc. (HXSC.F), and Micron Technology Inc. (MU), divert production capacity toward high-bandwidth memory, a premium form of DRAM used in AI data centers, supplies of conventional DRAM are tightening, driving prices higher.

High-bandwidth memory, or HBM, has become one of the most lucrative niches in semiconductors, benefiting from explosive demand linked to AI model training and inference.

The problem for enterprise IT buyers is that the same production lines also make standard DRAM, which supports servers, PCs, and a wide range of consumer electronics. As capacity tilts toward HBM, traditional DRAM is experiencing a supply shortage, driving up prices."

 

[turbineseaplane]

Hmmm... upgrading is already expensive for not many new features. Maybe the iPhone average lifecycle will stretch.

They have a solution for that..

OS support "rug pull"

 

[N0ughtsAndCr0sses]

Trust me, you don't want me to. My investment portfolio is generally a leading indicator of market reversals...

Eh, corrections will always be there, that’s the silly human sentiment fluctuation, but the society luckily as a whole will always ascend, my friend, so the trend will ALWAYS be going upwards ( until we go extinct hahaha ) despite the “jigsaw teeth” which are just background noise hahaha

 

[Polesky]

Shouldn't the use of integrated RAM insulate Apple from the effect of foundries having no DRAM chip capacity available?

 

[turbineseaplane]

As if they're not already overpriced. I'm keeping my current iPhone for as long as I can.

Delightfully, us iPhone Mini folks are totally unimpacted.

🤣

 

[ifxf]

Ios being much more efficient in memory use than android should help Apple.

 

[Analog Kid]

"[...] The problem for enterprise IT buyers is that the same production lines also make standard DRAM, which supports servers, PCs, and a wide range of consumer electronics. As capacity tilts toward HBM, traditional DRAM is experiencing a supply shortage, driving up prices."

This was my point it's the same basic equipment, just a capacity allocation difference. It's not a need to move from a DRAM process to a logic process, it's about different masks on the same process. I don't think the impact is much different than changing the mix of RAM capacities produced, for example.

I might be wrong and there may be something more fundamental, but that part of your quote suggests it's manufacturers running at capacity on existing machines and choosing to make the more lucrative chips. Not so much about tooling.

To the extent that DRAM makers think the demand spike is sustainable, they'll build out more capacity which should reduce the cost of all DRAM. If they over expand and a bubble collapses (and I don't necessarily subscribe to the "AI bubble" theory) then DRAM of all sorts will become dirt cheap for a process generation.

 

[ZeromusZeromus]

My 14 Pro is looking better than ever, may it last a decade. I'm not too upset that I can't play in the image playground or badly summarize the news or have a special camera button, which are the only things I seem to be missing out on for these premium prices. 🙄😉

 

[turbineseaplane]

Ios being much more efficient in memory use than android should help Apple.

I used to think this, but I'm not so sure.

Every time I pick up my old iPhone 6s on, I think iOS12?, I'm blown away at how fast and silky smooth everything is relative to new iOS versions.

I think we've been a little frog boiled here and it's particularly galling given the hardware horsepower running iOS these days.