A global memory shortage is about to push phone prices up

A shortage of memory chips that has been building for more than a year is about to show up on store receipts. Smartphones, laptops and game consoles are all getting more expensive because of a part buyers rarely think about: the DRAM and NAND flash chips that store data and run background tasks inside nearly every modern device. When Apple unveils its newest iPhones this month, the devices are expected to carry higher price tags than usual, and the reason has almost nothing to do with the phones themselves.

Why Memory Got Scarce So Fast

The shortage traces back to a shift in how chipmakers are using their factories. Instead of producing the ordinary DRAM and NAND that go into phones and laptops, manufacturers have been redirecting capacity toward the specialized, high-margin memory that powers artificial intelligence data centers.

That reallocation has squeezed the supply left over for consumer electronics, and industry insiders have taken to calling the resulting price spiral “chipflation” and “RAMageddon.”

The numbers behind those nicknames are stark. Contract prices for the DRAM used in smartphones rose roughly 56 percent in the first quarter of 2026 compared with the prior quarter, then jumped about another 83 percent in the second quarter. A 16-gigabyte DRAM package that cost a device maker around $42 in the second quarter of 2025 was running closer to $181 a year later, an increase of more than 300 percent in a single year.

What It Means for the Next iPhone Generation

Apple has been unusually direct about the pressure. Company leadership told investors that memory costs were expected to climb again heading into September, and supply-chain reporting indicates Apple has already trimmed its 2026 hardware shipment plans because of the crunch, a sign the company expects to sell fewer units at higher prices rather than absorb the cost increase itself. With only three companies in the world capable of supplying DRAM at scale, Apple has little room to negotiate around the shortage or switch suppliers to dodge it.

That scarcity is expected to reach shoppers directly. Analysts tracking the supply chain say the new iPhone lineup arriving this week is likely to cost more than its predecessor once memory and storage tiers are priced in, with the increase falling hardest on higher-storage models that pack in more DRAM and NAND per unit. Supply-chain reporting has also indicated that Apple trimmed its own 2026 hardware shipment forecasts as the shortage worsened over the summer, a sign the company is planning around scarcer components rather than expecting the squeeze to ease before its biggest product launches of the year.

Micron’s Record Margins and a Fab That Will Not Help for Years

Micron, one of the three global DRAM suppliers alongside Samsung and SK Hynix, controlled roughly a quarter of the memory market in the second quarter of 2026, and the shortage has been extraordinarily good for its bottom line. The company’s adjusted gross margin reportedly hit a record 85 percent as prices for its existing inventory climbed. In July, Micron broke ground on a new $9.3 billion memory fabrication plant, but that facility is not expected to begin production until the third quarter of 2028, meaning the added supply is years away from easing today’s prices.

Other memory makers are seeing similar windfalls. Shares of competitor SK Hynix jumped as investors reacted to the same dynamic, betting that AI-driven demand for memory will keep outstripping supply well into the back half of the decade, with some industry forecasts warning the shortage could persist past 2030 if data center buildouts continue at their current pace. Samsung, the third of the three dominant DRAM suppliers, has faced the same pressure to choose between selling into the higher-margin AI market or keeping consumer electronics customers supplied at older price levels.

Beyond Phones: Laptops and Consoles Feel It Too

Smartphones are the most visible casualty, but they are far from the only one. Laptop makers that build memory directly onto motherboards are facing the same rising component costs, and game console manufacturers, which rely on both DRAM for system memory and NAND for storage, are exposed on two fronts at once. Because none of these product categories can simply substitute a cheaper part, the added expense is expected to move down the supply chain until it reaches a sticker price.

The timing compounds the problem for device makers. Product cycles for phones, laptops and consoles are typically locked in more than a year in advance, which means companies negotiating memory contracts today are effectively guessing how much scarcer, and costlier, the same chips will be by the time a device ships. That has left manufacturers with a narrow set of choices: raise prices, shrink profit margins, or trim the base storage capacity offered on new models.

A Reversal of a Decades-Long Trend

For most of the last thirty years, memory has been one of the more predictable parts of consumer electronics: prices per gigabyte fell steadily as manufacturing improved, making it easier for device makers to add more storage and RAM without raising retail prices. The current shortage breaks that pattern. Instead of memory getting cheaper as manufacturing scales, AI infrastructure demand has pulled enough capacity out of the consumer pipeline that prices are moving the opposite direction, and industry analysts say there is no clear point at which that trend is expected to reverse.

Until new fabrication capacity comes fully online later in the decade, the practical effect for shoppers is straightforward: the phones, laptops and consoles bought over the next year or two are likely to cost more, or offer less storage for the same price, than the devices they are replacing. Buyers who were used to treating extra storage as a modest upgrade fee may now find that the price gap between a base model and a higher-capacity version has widened considerably, simply because the memory chips inside cost the manufacturer several times what they did two years earlier.

Trade-in and resale markets are likely to feel a ripple effect as well. When new devices carry higher launch prices, used and refurbished models with the same memory specifications tend to hold their value longer, since the gap between buying new and buying secondhand widens along with the cost of the components themselves. For budget-conscious shoppers, that could make the secondhand market a more attractive option than it has been in recent years, at least until new fabrication capacity from Micron and its rivals starts to bring memory prices back down.

This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.

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