Наталя ХандусенкоGadgets
5 July 2026, 12:53
2026-07-05
AI vs. Cheap Smartphones: Phones in the $220 Range Could Disappear in 2027
The supply of DRAM for consumer electronics is predicted to only get worse next year. Many industry analysts are inclined to believe that budget smartphones will face bleak times as early as 2027. With AI data centers literally “eating up” existing DRAM supplies (which could soon account for over 60% of the total), phone manufacturers will be left with a meager surplus. They will simply have no choice but to raise prices.
The supply of DRAM for consumer electronics is predicted to only get worse next year. Many industry analysts are inclined to believe that budget smartphones will face bleak times as early as 2027. With AI data centers literally “eating up” existing DRAM supplies (which could soon account for over 60% of the total), phone manufacturers will be left with a meager surplus. They will simply have no choice but to raise prices.
DRAM prices have increased by almost 700% since 2022, with just three manufacturers controlling 90% of all supplies, writes Wccftech.
Even with a class action lawsuit against Samsung, SK hynix, and Micron, the price of DRAM will not be able to be contained. According to a report by MyDrivers, by the end of 2026, more than half of all memory will be used for computing for artificial intelligence. Obviously, this supply imbalance means that smartphone manufacturers, including Apple, will not only have to put up with higher prices, but also fight to obtain sufficient quantities of components.
The report mentions that budget smartphones in the 1,500 yuan (or $220) price range may disappear from the market completely by 2027.
Experts estimate that memory costs will now account for up to 60% of the cost of a smartphone, making it virtually impossible for companies to make a profit unless they raise prices significantly. Research firm IDC predicts that smartphone shipments will fall to their lowest level since 2013, while PC shipments will also plummet.
Chinese DRAM suppliers may ease the situation somewhat, but a price adjustment in the market is currently a distant prospect.
With Samsung, SK hynix, and Micron controlling 90% of the world's DRAM supply, the only light at the end of the tunnel is Chinese companies CXMT and YMTC. While these manufacturers will have no problem supplying chips to the domestic market for giants like Huawei, Xiaomi, OPPO, and others, the rest of the companies will have to overcome numerous geopolitical obstacles to integrate these components into their production.
While Apple continues its lobbying efforts with the Trump administration in hopes of resolving supply chain issues, the partnership with Chinese companies CXMT and YMTC won't mean customers will get DDR or LPDDR memory at lower prices. As noted by reputable analyst Ming-Chi Kuo, this tandem will only reduce the risk of shortages.
Given the current situation, the priority for smartphone manufacturers will be to ensure maximum supply volumes, rather than negotiate price reductions. Unfortunately, minimizing the risks of shortages will not solve the price dilemma. That is why budget smartphones will either disappear completely or become significantly more expensive, forcing consumers to overpay for devices with fewer features.
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