According to Counterpoint Research, global smartphone shipments are projected to decline 2.1 per cent next year as rising semiconductor costs begin to weigh on demand. The report said that electronics supply chains have been under pressure in recent months due to a shortage of legacy memory chips, as manufacturers increasingly prioritise high-end memory used in artificial intelligence (AI)-focused semiconductors. This shift has tightened supply for components typically used in smartphones.
Chinese smartphone brands such as Honor and Oppo are expected to be particularly exposed, especially in the entry-level segment where margins are already thin, the report noted. Meanwhile, it added that Nvidia’s decision to use smartphone-grade memory chips in its AI servers could further disrupt the market. The move could push server-memory prices to nearly double by late 2026.
Given that each AI server consumes far more memory chips than a smartphone, the resulting surge in demand is likely to strain an industry that is currently unprepared to scale supply at that pace, the report noted.
