Nothing CEO Says Memory Tops 50% of Smartphone Costs as AI Boom Lifts Prices
Updated
Updated · TechSpot · Jun 15
Nothing CEO Says Memory Tops 50% of Smartphone Costs as AI Boom Lifts Prices
3 articles · Updated · TechSpot · Jun 15
Summary
Memory chips now make up more than 50% of a smartphone’s hardware bill, Nothing CEO Carl Pei said, warning that higher device prices will keep spreading into 2027.
AI data-center buildouts have upended the usual decline in component costs, driving DRAM and likely storage prices sharply higher and leaving phone makers with little bargaining power.
For Nothing’s Phone (4a), memory costs more than doubled from design to launch and then doubled again, Pei said, while phones launched since February are about $100 pricier than prior generations.
In India, devices once priced above ₹30,000 are now roughly ₹7,000 higher, and Pei said this year’s sales season is unlikely to bring the discounts consumers are used to.
The squeeze is spreading beyond smartphones: HP’s CFO said earlier this year that memory now accounts for more than 30% of a PC’s bill of materials.
As AI devours global chip supplies, will essential electronics soon become unaffordable luxuries for the average consumer?
Is 'RAMageddon' a real supply crisis, or a strategy by tech giants to justify permanently higher prices on our devices?
Global Smartphone Shipments Fall 6% in 2026 Amid AI-Driven Memory Chip Crisis and Soaring Prices
Overview
In 2026, the global smartphone market is facing a major upheaval due to persistent memory chip shortages. This has led to a sharp rise in component costs, which manufacturers are passing on to consumers through record-high smartphone prices. As a result, the average selling price of smartphones has increased, and the market is contracting because brands cannot freely buy memory to meet demand. The supply-constrained environment, driven by memory shortages, is putting pressure on pricing across all segments, making discounts rare and limiting production growth. Consumers are directly impacted, experiencing higher prices and fewer choices in the market.