US Business Groups Warn AI Memory Chip Crunch Could Lift Prices, Hit 1.08 Billion Smartphone Market
Updated
Updated · Reuters · Jun 3
US Business Groups Warn AI Memory Chip Crunch Could Lift Prices, Hit 1.08 Billion Smartphone Market
3 articles · Updated · Reuters · Jun 3
Summary
U.S. automaker, retailer, medical-device and telecom groups told the Treasury and Commerce departments that a worsening memory-chip imbalance is already raising costs and threatening supply chains for consumer goods.
AI data centers are absorbing an enormous share of memory-chip capacity, the letter said, driving an unprecedented price surge and leaving less supply for manufacturing and consumer-facing industries.
The groups said the fallout is spreading to everyday electronics, internet and telecom infrastructure, automobiles and medical devices, with near-term price increases for American households at risk of becoming sustained.
The warning adds to signs of a broader market squeeze: Reuters reported in December that AI and consumer-electronics firms were fighting for dwindling memory-chip supplies, and Counterpoint now sees smartphone shipments falling 13.9% to 1.08 billion.
As AI giants consume the world's memory chips, are affordable cars and smartphones becoming a thing of the past?
Is the AI boom's hidden energy crisis a greater threat than the global chip shortage it created?
2026 Smartphone Market Faces Record 10–15% Decline as AI Demand Triggers Memory Chip Shortage and Reshapes Industry
Overview
In 2026, the global smartphone market is facing an unprecedented crisis due to a severe memory chip shortage. This disruption is causing significant challenges for the industry, with a sharp contraction in shipments, especially among leading manufacturers in the budget segment. The crisis is not just a temporary setback but highlights deeper structural issues that impact both manufacturers and consumers. As a result, the market is experiencing immediate and severe consequences, including reduced availability of affordable smartphones and major changes in market dynamics. This situation marks a turning point for the entire industry.