RAM shortage could doom budget phones: Latest predictions at MWC 2026

The race to build AI infrastructure has consumed so much memory that prices have skyrocketed, analysts predict Product costs will rise as a result. But the forecast is much worse than expected. New reports and forecasts suggest that the RAM shortage may prompt manufacturers of cheap devices to reduce or even stop production for some time.

Smartphone shipments are Expected to decrease by 13% Until 2026 compared to last year, according to the International Data Corporation. This will not only be a temporary crisis, but “a tsunami-like shock originating in the memory supply chain, with ripple effects spreading across the entire consumer electronics industry,” Francisco Geronimo, vice president of global client devices at IDC, said in a previous statement.

When it was reached at MWC 2026, Geronimo predicted that this effect would not happen immediately. Phone sales will remain largely flat through the first quarter of the year (which is almost over) as resellers buy up as much inventory as possible, but shortages will start to impact phone production around the second quarter, between April and June.

Phones are already becoming more expensive, as analysts expected. The Samsung Galaxy S26 and S26 Plus launched with a $100 price increase over their predecessors – although they also raised the minimum storage to 256GB from 128GB. Anshil Saj, principal analyst at Moor Insights and Strategy, said the premium segment such as low-cost and large phones will likely not be affected.

“That’s why you actually see that Chinese (phone manufacturers) are actually having to raise prices,” Sage said.

With the shortage, RAM prices are rising, reaching three times last year’s levels, according to A Counterpoint Research A report issued at the end of February. Cheaper devices, which already have thin profit margins, will likely see their profits evaporate. At that point, it’s not worth selling those phones.

“Some sellers tell us that they are considering leaving this (budget) segment entirely, because if you sell a phone for $150, and half the cost is memory, where are you going to make money? There’s no point in selling products, right?” Geronimo said.

Geronimo noted that if the cheaper budget sector exits the phone industry within the next year, that would mean 10% of the global market would disappear.

The shortage is already affecting the pricing plans of phones scheduled for launch. At MWC 2026, several phones were shown off without final prices, such as the Unihertz Titan 2 Elite that was shown off at MWC and that will soon be sold on Kickstarter. Before the RAM shortage, the price of an upcoming phone would be set weeks or months before it hit store shelves. Now, it is very risky to set the price even right before selling it. They may not even have enough memory to provide the first batch of products at the predetermined price, and they will likely raise prices after that, Geronimo said.

For example, Al Qaeda The Xiaomi 17 was launched recently At a price of 999 euros, but Geronimo predicted that “the price they announced on stage is not the price at which they (will) see (the phone). The price in the store, in many operations, will be 100 euros more than what they said on stage,” he says.

When will the RAM crisis end?

Unlike last year’s tariffs and financial volatility that phone makers have largely absorbed, RAM shortages are inevitable — there are simply far fewer of these components to do without.

“This is not a short-term thing,” Geronimo said. “You can’t build 1,000 factories in three or four months. (That would take) two to three years.”

Geronimo explained that according to IDC’s current forecasts, the crisis will not last long – only a year and a half to two years. This could be shortened if other, smaller suppliers begin producing the memory and alleviate the shortage, but the reported conditions are harsh, with RAM manufacturers demanding advance payment for periodic shipments with the expectation that the next batch of modules may cost more.

But the IDC analyst also laid out another potential mitigation floated late last year — that manufacturers would reverse their previous path of increasing RAM with each generation and actually shrinking it in the next. Geronimo explained that even if using less memory in phones was cheaper, it would detract from the experience a lot, causing a lot of retailers to return their phones due to poor performance. RAM is not only used to run AI models, it also allows people to keep multiple applications open and running simultaneously.

In terms of components, major companies did not comment on the shortage, and even announced that they would not take questions about this topic at the beginning of the press conferences.

Dipanjan Chatterjee, vice president and principal analyst at Forrester, said it is understandable that rising phone prices are likely to prompt people to postpone upgrading, increasing the time they keep their current phones. He said the onus is on brands to counter this upgrade lethargy in two ways: diversifying revenue streams to rely more on non-phone sales, like Apple does with its services, and second, adding more bells and whistles to make price increases more palatable.

Hence, Samsung is increasing the storage space of the Galaxy S26 along with the price hike. Samsung itself is better placed to capture sales through its tradition of aggressive deals and incentives during product launches. When the Galaxy S26 lineup launched, it also offered trade-in and promotional deals to offset the $100 price increase, including pairing other gadgets with its phones.

While the lack of RAM is the biggest factor driving these price increases, there are other factors that play a role as well. Global instability, including the recent war in the Middle East, forces the rerouting of transportation outside the no-fly zones, resulting in higher product transportation prices. Components across the board are becoming more expensive as well.

The good news is that this rise in prices will not last forever. Eventually, the race to build more AI data centers will slow down, and combined with more memory manufacturing, prices will stabilize. But like all other consumer goods that have seen prices rise, affordability will likely never go down to what it once was.

“I don’t think the price of memory will drop to the same levels as last year,” Geronimo said.