Global Memory Shortage May Extend Through 2027 as Smartphone Price Hikes Spread
Alina Collins
Global memory supply remains tight, with upstream suppliers warning that 2027 could be even worse than 2026; smartphone price hikes are spreading across China's market, hitting budget and mid-range models hardest.
How severe is the memory shortage?
Transcend chairman Peter Shu said on August 5 that upstream suppliers have warned: supply in 2027 may be tighter than in 2026, with pricing pressure lasting well beyond the near term.
Transcend posted record-high revenue in the first half, but its inventory value has surpassed NT$20 billion due to rising component costs.
Even if ChangXin Technology — China's leading DRAM maker — ramps up capacity after its IPO, building a production line takes at least two years. Meaningful supply relief is unlikely within the next 12 to 18 months.
This means → there is no cavalry coming soon. This shortage is not a one- or two-quarter blip — it could stretch through 2027 and beyond.
Why are smartphones getting more expensive?
Huawei's Richard Yu warned on August 5 that surging memory costs could trigger broad-based smartphone price hikes. Selling at old prices would mean losses.
When he launched the Huawei Pura 90 series in April, Yu noted that per-unit costs had risen RMB 1,200–1,500 versus the prior generation.
According to Counterpoint Research, OPPO raised prices on March 16, vivo followed two days later, and Xiaomi hiked select Redmi models. Major Chinese brands raised prices by RMB 200–500 across the board.
Huawei raised the entire nova 15 lineup in July — RMB 300 per storage tier. The 256 GB base model went from RMB 2,699 to RMB 2,999.
Where is the pricing pressure coming from?
The root cause: upstream DRAM and NAND flash suppliers are prioritizing capacity for AI data-center products — HBM (high-bandwidth memory, ultra-fast memory built for AI chips) and server DRAM.
In plain terms = memory fabs have finite capacity. AI servers pay more and yield fatter margins, so consumer electronics gets a shrinking share.
Reuters reported in July that ChangXin Technology has raised prices on Huawei multiple times and rejected Huawei's requests for discounts.
This reflects a shift in bargaining power: even a customer as large as Huawei is losing leverage as upstream capacity tilts toward AI.
Who is getting hit hardest?
Entry-level and mid-range smartphones bear the brunt. In some budget models, memory now accounts for 40%–50% of total bill-of-materials cost, leaving manufacturers almost no room to absorb the increase.
This means → the cheaper the phone, the greater the price pressure — because memory's share of total cost is highest, and there is no profit from other components to subsidize it.
China's smartphone market saw shipments decline 2% year-over-year in Q2 2026. Manufacturers are adopting more conservative production plans and shifting toward higher-margin products.
How far has the price surge spread?
According to market research firm CONTEXT, memory prices per GB in Western European distribution channels had more than tripled year-over-year by Q2 2026.
The 32 GB per-GB price reached €12.48, 11.6% higher than comparable 16 GB products. A year earlier, 32 GB memory was actually 9.5% cheaper per GB than 16 GB.
In plain terms = buying in bulk used to mean a lower unit price. Now it is the opposite — larger capacities cost more per GB, a sign that the shortage has distorted normal volume-discount pricing.
When could this pricing cycle end?
As a second round of retail price hikes rolls out, new models using recently purchased memory are expected to weigh on demand further in the second half.
The key variable is the supply side: new production lines take at least two years from groundbreaking to volume output. Even if construction starts now, meaningful relief would not arrive until around 2028.
This means → for consumers planning to upgrade a phone or PC, there is little room to wait for lower prices in the near term. For manufacturers, product strategy will keep tilting toward higher-margin models.
Content is for reference only, not financial advice.