memory shortage

The global smartphone market faces its sharpest decline on record in 2026, with shipments expected to hit their lowest since 2013. This downturn is driven by a severe memory chip shortage, exacerbated by AI sector demand, which deprioritizes smartphone manufacturers. Component costs are rising, forcing price increases and potentially favoring mid- to high-end models. This situation may boost the used smartphone market and lead to longer replacement cycles, with a market inflection point anticipated in late 2027.

Qualcomm exceeded Q1 earnings expectations, but its stock declined due to cautious guidance. The company cited a global memory shortage, particularly for data centers, as the main constraint impacting smartphone and consumer electronics production. While underlying demand is strong, supply chain limitations, especially in memory, are projected to define market size. Emerging segments like IoT and automotive showed robust growth.

SanDisk’s stock soared after a strong Q2 earnings report, significantly beating Wall Street expectations. Driven by AI demand and a flash storage chip shortage, the company exceeded profit and revenue forecasts. SanDisk’s optimistic Q3 outlook, projecting substantial growth in both revenue and earnings, led to an “outperform” upgrade from Raymond James. The memory chip shortage, with demand outpacing supply, is enabling price increases and strong profit margins for companies like SanDisk, impacting various tech sectors.

The booming AI sector is causing an unprecedented shortage of memory (RAM), driving prices sky-high. Demand for specialized High Bandwidth Memory (HBM) is particularly intense, leading memory manufacturers to prioritize AI chips over consumer electronics. This scarcity has significantly increased component costs, impacting everything from laptops to gaming consoles, with supply unlikely to meet demand for the next couple of years.

Micron announced it will exit the consumer “Crucial” memory business to focus on high‑performance AI chips and high‑bandwidth memory for data‑center workloads. The shift aims to meet surging AI‑driven demand and reallocate capacity to higher‑margin segments, despite a 3% stock dip after the news. Micron now competes with SK Hynix and Samsung as the sole U.S. supplier, supporting Nvidia, AMD and Google’s AI accelerators, while analysts raise its price target amid strong cloud‑memory growth.