Upgrading your smartphone could become increasingly expensive, even for people who have no interest in the latest flagship models. Behind the potential price increase is a component that often gets overlooked when looking at a phone’s specs: memory.
Surging demand tied to artificial intelligence is putting pressure on chip and memory production, as manufacturers redirect an increasingly large share of their resources toward the components used in data centers. Against this backdrop, the market will have to contend with limited availability and rising memory costs, with possible knock-on effects for smartphone prices as well.
Why artificial intelligence is driving up memory costs
Smartphones typically use DRAM as temporary memory for running apps and processes, while NAND flash handles storage for photos, videos, apps, and the operating system. AI-focused data centers, by contrast, also rely on HBM (high-bandwidth memory), designed to deliver much higher data-transfer speeds.
The expansion of AI systems requires enormous amounts of hardware, and large data centers are buying up an ever-growing share of components to meet that need. As a result, the AI market has become an especially lucrative one for manufacturers.
Even though factories haven’t stopped producing memory for smartphones, a significant share of investment and output is being redirected toward components destined for AI systems, where demand keeps climbing.
How much have smartphone memory costs risen?
To understand the scale of the problem, it helps to look at the numbers. According to data reported by iGizmo based on Counterpoint Research, the estimated cost of 16 GB of DRAM for smartphones rose from about $42 in the second quarter of 2025 to about $181 in the same quarter of 2026. These are indicative supply-chain figures, not the price actually paid by any individual manufacturer.
A rise in memory costs doesn’t automatically translate one-to-one into a higher final price for a handset. But when higher component costs combine with tighter supply, manufacturers have to decide how to absorb the impact. The latest market analyses suggest that rising demand for chipsets and memory could push component prices up by as much as 17%, with possible knock-on effects for finished devices too.
Which smartphones are most at risk of costing more?
Contrary to what one might expect, budget models are the most exposed to potential price increases. These devices carry thinner profit margins, leaving less room to absorb higher component costs. Manufacturers may end up passing part of the increase on to retail prices.
Another option is to keep the price low but scale back specifications — for instance, by reducing the amount of memory included, or by shifting focus toward mid-to-high-end models instead.
Larger companies, on the other hand, can rely on bigger purchase volumes and supply agreements that make it easier to manage fluctuations in the supply chain. That doesn’t make them immune to the problem, but it does give them more room to maneuver.
Will smartphone prices keep rising?
Forecasts for the near future point to a market still under pressure. IDC (International Data Corporation), one of the world’s leading market research firms in information and communications technology (ICT), projects a global average smartphone price of $581 for 2026, up 27.6%, while shipments are expected to fall 16.7%.
The same analysis also points to supply difficulties persisting through 2026 and much of 2027. Meaningfully expanding production capacity takes years, while AI-driven demand keeps reshaping the industry’s priorities.
Editor’s note
This article was originally published in Italian on money.it by Emanuela Ceccarelli on September 26, 2026 as «Smartphone, perché l’IA sta facendo aumentare i prezzi». It has been translated and adapted for an international audience by the Money.it International desk.
