RAM reminiscence chips are seen on this illustration photograph. SOURCE: REUTERS
International demand for smartphones, private computer systems and gaming consoles is anticipated to shrink this yr as firms from Britain’s Raspberry Pi (RPI.L) to HP Inc (HPQ.N) elevate sticker costs to offset surging reminiscence chip prices.
The speedy build-out of synthetic intelligence infrastructure by US tech companies resembling OpenAI, Alphabet-owned (GOOGL.O) Google and Microsoft has absorbed a lot of the world’s reminiscence chip provide, pushing up costs as producers prioritise parts for higher-margin knowledge centres over shopper gadgets.
Samsung (005930.KS), SK Hynix (000660.KS) and Micron (MU.O), the world’s three largest producers of reminiscence chips, have mentioned in latest months that they had been struggling to maintain up with demand as they reported rosy quarterly earnings on the again of surging costs for his or her semiconductors.
However the value surge is rippling by means of shopper markets.
Analysis companies IDC and Counterpoint each now anticipate international smartphone gross sales to shrink no less than 2% this yr, in a pointy reversal from their development outlook a couple of months in the past. That will mark the primary annual decline in shipments since 2023.
The PC market is anticipated to shrink no less than 4.9% in 2026, IDC estimated, after an 8.1% development final yr. In the meantime, console gross sales are anticipated to fall 4.4% within the present yr after an estimated development of 5.8% in 2025, in response to TrendForce.
PC and Smartphone markets are bracing for contraction
Robust decisions for producers
Whereas a number of companies have already raised costs, business heavyweights Apple (AAPL.O) and Dell (DELL.N) face a tricky alternative: tackle the prices and sacrifice margins or cross them on to shoppers on the danger of stifling demand.
“Producers may soak up some prices, however given the size of the scarcity, it’s definitely going to point out up as increased costs for shoppers,” Emarketer analyst Jacob Bourne mentioned.
“It will end in extra tepid shopper system gross sales in 2026. Will probably be a problem for these firms which can be attempting to promote merchandise throughout a time of broader inflation.”
Stress is being compounded by expectations that the worth will increase will persist, presumably into subsequent yr. Counterpoint estimates that reminiscence costs will bounce 40% to 50% within the first quarter, after final yr’s 50% surge.
“Over the past two quarters, we have seen 1,000% value inflation in some merchandise, and pricing is constant to rise,” mentioned Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide.
“Customers can anticipate to pay considerably increased costs for laptops, cellphones, wearables and gaming gadgets very quickly.”
Analysts imagine the affect is prone to be most pronounced for producers of low- and mid-range gadgets, resembling Chinese language smartphone makers Xiaomi (1810.HK) and TCL Expertise (000100.SZ) and PC agency Lenovo (0992.HK).
TrendForce mentioned final yr that Dell and Lenovo had been planning value hikes of as a lot as 20% early in 2026.
Shares of all Raspberry Pi, Xiaomi, Dell, HP Inc., and Lenovo fell within the final three months of 2025, with Xiaomi posting the largest drop with a 27.2% decline.
Electronics shares react to the reminiscence chip scarcity
HP CEO Enrique Lores mentioned in November the corporate would elevate PC costs as a result of “vital” reminiscence chip prices, whereas Raspberry Pi CEO known as the fee surge “painful” in a December weblog put up asserting value will increase for its gadgets.
The weaker demand outlook might additionally hamper gross sales at electronics-focused retailers resembling Finest Purchase (BBY.N), which had already warned final yr that tariff-driven value will increase might dissuade potential patrons.
Apple will report earnings on January 29, whereas Dell is slated to report on February 26. Xiaomi normally experiences in late March.
Apple’s market energy
Some analysts mentioned Apple, with its scale, pricing energy and deep provider community, is best positioned to climate the reminiscence chip value surge than its smaller rivals.
The corporate usually holds costs of its flagship iPhone lineup within the US regular between its September launch occasions. Final yr, it absorbed the tons of of tens of millions of {dollars} in tariff-related prices, as a substitute of passing them on to clients.
“Apple is better-positioned, because it makes use of contract pricing (fairly than extra risky spot pricing) for its purchases, securing higher costs,” Morningstar analyst William Kerwin mentioned.
“Nevertheless it is not immune, and may have to boost costs to cross on increased enter prices.”
