Memory Chip Shortage Weighs on China Smartphone Demand
Claire Weston
China's June smartphone shipments fell 17% year-on-year to 17 million units, with Goldman Sachs pointing to AI data-center buildouts draining memory-chip supply and pushing up end-device costs — the shortage is now travelling from server rooms to consumers' pockets.
How bad is the shipment drop?
June shipments hit 17 million units, down 17% year-on-year and 36% from May. This means → June was the coldest single month this year, far beyond seasonal swings.
Q2 totalled 69 million units, roughly flat versus last year and the prior quarter — but above Goldman's earlier forecast of 59 million. In plain terms = the quarterly total still holds, but the monthly trend is deteriorating.
Goldman analyst Allen Chang forecasts full-year 2026 shipments will fall 10% year-on-year, dragged down by rising memory costs suppressing demand.
Are 5G phones immune?
June 5G shipments fell 12% year-on-year to 16 million units, accounting for 85% of the total market.
Chang wrote in his report: "We expect 2026 shipments to decline 10% YoY as rising memory costs weigh on demand."
This reflects that memory-price pressure cuts across technology generations — 5G models get no exemption for being "higher-end."
Fewer cameras per phone — but better ones?
Average camera count per handset dropped from a 2022 peak of 3.8 to 2.9 this year.
Yet cameras with at least 20-megapixel resolution rose from 57% of the mix in 2025 to 66%.
This means → under cost pressure, makers are cutting "filler lenses" and concentrating budgets on fewer but higher-spec units. In plain terms = quantity is out, per-unit quality is in.
Why did memory chips suddenly run short?
The root cause: AI data-center buildouts keep draining memory-chip supply — phones and servers draw on the same pool of base components — driving up component costs.
Samsung has already raised prices on its Galaxy lineup; Apple has warned that supply constraints will widen significantly next quarter.
This means → AI's hunger for compute is pushing cost pressure through the memory-chip chain, all the way from data centers to the phone in your hand. China's shipment decline is the latest signal that this chain has reached the consumer end.
Content is for reference only, not financial advice.