Disaster-level warning! IDC: Memory chip crisis intensifies, smartphone market to plummet by 13% in 2026.

Research firm IDC stated that due to an unprecedented shortage of memory chips, the global smartphone market is expected to shrink by 12.9% in 2026, calling it a "crisis like no other." This latest revision, significantly lower than previous forecasts, reveals the latest impact of the ongoing memory shortage on various corners of the electronics industry. The demand for advanced memory to meet artificial intelligence tasks has depleted global supplies until next year, now further endangering the business models of many smartphone manufacturers. IDC currently predicts that smartphone shipments in 2026 will be around 1.1 billion units, lower than the 1.26 billion units of the previous year, turning years of slow growth into nothing. Smartphone manufacturers are adjusting to rising component costs by tightening specifications, eliminating unprofitable entry-level models, and pushing consumers to purchase higher-end devices. IDC's Senior Research Director Nabila Popal said, "Compared to this, tariffs and the pandemic crisis seem like jokes. After this crisis is over, the smartphone market will experience dramatic changes in terms of scale, average selling price, and competitive landscape. We expect the situation to ease only by at least mid-2027." The soaring cost of chips (including DRAM for processing tasks and NAND for storage) is impacting the already slim profit margins of many Android device brands. Chinese companies like Xiaomi and OPPO are investing heavily in top components to compete for consumers, dominate larger shares of the domestic market, and enhance brand image on the global stage. IDC points out that their entry-level models are most affected by the new cost pressures, as memory accounts for a higher proportion of their material costs. After the world's largest mobile processor supplier Qualcomm released its financial report this week, its CEO Cristiano Amon said, "We just hope to have more memory. This issue is not only about prices, but also about supply. Therefore, I believe memory supply will determine the overall size of the smartphone market." High-end smartphones, such as Apple's iPhone product line, will better withstand this crisis, although companies like Xiaomi and LENOVO GROUP have warned that consumer prices may have to increase. The memory shortage is expected to continue until 2027, and even if supply is replenished, it is unlikely to return to the original pricing system. Popal stated, "The era of cheap smartphones has come to an end, because even if the crisis is over, we expect memory prices to not return to the levels of 2025." Last year, shipments of smartphones priced below $100 were around 170 million units, and IDC believes that this segment of the market is currently unprofitable and difficult to sustain.