Chip crunch to curb smartphone output in 2026: industry research firm
Consumer electronics makers are stockpiling memory chips in anticipation of rising costs
[HONG KONG] Global smartphone shipments may decline 2.1 per cent in 2026 as a shortage of memory chips drives up costs and squeezes production, said industry tracker Counterpoint Research.
This marks a dramatic reversal from an estimated gain of 3.3 per cent this year, with the influential research firm slashing its projection for next year from a previous estimate of a marginal 0.45 per cent growth.
The average selling price for handsets is set to rise 6.9 per cent globally next year, reflecting a 10 to 25 per cent jump in the overall cost of its components, Counterpoint said in a research report on Tuesday (Dec 16).
The global artificial intelligence expansion has spurred semiconductor producers this year to prioritise advanced memory for Nvidia’s accelerators over the more basic products.
This has fomented a shortage of the dynamic random access memory, also known as RAM, that is indispensable in electronics, from laptops and electric vehicles to medical devices and appliances.
In recent months, consumer electronics makers including Xiaomi have sounded the alarm about potential price increases, while others, including Lenovo Group, have begun stockpiling memory chips in anticipation of rising costs.
Nintendo’s shares have declined most of December, as concerns grow about the impact on its flagship Switch 2 console and profitability.
With smartphones, Chinese brands such as Honor Device and Oppo are seen as more vulnerable because of their lower margins. The memory chip deficit is likely to hurt entry-level smartphones in particular, said Counterpoint.
“Apple and Samsung are best-positioned to weather the next few quarters,” said Counterpoint senior analyst Yang Wang. “But it will be tough for others that don’t have as much wiggle room to manage market share versus profit margins. We will see this play out, especially with the Chinese original equipment manufacturers, as the year progresses.”
The consumer impact could be felt in several ways.
One approach will be for companies to push users to more premium models, where the profit impact will be less severe, the research firm said. Other options include reusing old components, downgrading other specifications like cameras or just selling handsets with less memory, Counterpoint said in its report. BLOOMBERG
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