PC and smartphone markets to shrink in 2026 thanks to DRAM pricing and shortages

With the price for memory doubling and supply being limited due to the increased demand from AI and data centers, consumer tech is set to be hit hard.

PC and smartphone markets to shrink in 2026 thanks to DRAM pricing and shortages
Comment IconFacebook IconX IconReddit Icon
Senior Editor
Published
1 minute & 30 seconds read time
TL;DR: A severe DRAM and flash memory shortage, driven by data center, AI, and cloud demand, has doubled DDR5 prices, significantly raising device costs. Analysts predict a 75% year-over-year DRAM price increase in Q4, leading to shrinking smartphone, laptop, and PC markets in 2026 and reduced product profitability.

It's been one of the most talked-about topics in recent weeks: an unprecedented shortage and supply of DRAM and flash memory for technology, driven by unrelenting demand from the data center, AI, and cloud sectors. With industry and financial analysts sounding the alarm, the price of 16 Gigabits of DDR5 has more than doubled in the past month, rising to $24.80 per unit on November 17.

PC and smartphone markets to shrink in 2026 thanks to DRAM pricing and shortages 2
2

And that's Gb, not GB, which would make it 2GB of DDR5 memory that's 130% more expensive now than it was a month ago. As detailed in a new report over at Hankyung, memory can account for anywhere between 20 to 50% of the cost of devices like smartphones or PCs, so a price increase of this magnitude will have a massive impact on the profitability of countless products.

The analysts at TrendForce predict that fixed or contract pricing for DRAM in the fourth quarter will increase by 75% year over year. Unfortunately, this means that the global smartphone, laptop, and PC markets will most likely shrink in 2026. TrendForce has lowered its growth rate prediction for PC production from +0.1% to -2.0% for 2026, while the smartphone market is expected to be hit even harder, with its growth rate dropping from +1.7% to -2.4%.

In the financial space, Morgan Stanley is sounding the alarm, citing an impending "cost shock" that will affect the industry. By eating into profitability, Morgan Stanley is downgrading companies like HP, Lenovo, and Dell from 'Buy' to 'Sell.'

For consumers, this means that just about everything in technology is set to increase in price, including smartphones, tablets, laptops, PCs, and hardware like graphics cards. And it has gotten to the point where companies may cancel or stop producing low-end or entry-level products for consumers because memory costs are simply too high. This will also mean that things like laptops will be sold with less memory capacity to save on costs.