Global Smartphone Shipments Plummet to 13-Year Low Amid AI-Driven Memory Shortages

Global smartphone shipments in the second quarter of 2026 dropped by 11% year-on-year, reaching their lowest level since 2013. This decline is largely attributed to AI-driven memory shortages, which have pushed up prices, particularly for entry-level smartphones where memory can constitute half of the manufacturing cost. DRAM and NAND memory prices have significantly increased, with some 32GB kits soaring from $100 to $350. China experienced the most substantial fall, with three of its top five suppliers seeing sales slump for the fifth consecutive quarter. In contrast, Apple and Samsung, which maintained stable consumer prices, reported slight sales growth.

Context

Smartphone shipments have reached a 13-year low, with an 11% year-on-year decline in the second quarter of 2026. This downturn is primarily driven by AI-related shortages in memory components, which have led to increased costs for manufacturers. The price surge in DRAM and NAND memory has particularly affected entry-level smartphones, where memory costs can account for a significant portion of overall production expenses.

Why it matters

The decline in global smartphone shipments indicates a significant shift in the technology market, reflecting broader economic trends and consumer behavior. This situation highlights the impact of supply chain disruptions, particularly in the memory sector, which is essential for smartphone production. Understanding these dynamics is crucial for consumers, manufacturers, and investors alike as they navigate a changing landscape.

Implications

The ongoing decline in smartphone shipments may lead to reduced revenue for manufacturers, particularly those heavily reliant on entry-level models. Consumers could face higher prices as manufacturers adjust to increased component costs. Furthermore, the memory shortages may prompt companies to innovate or diversify their supply chains, potentially reshaping the industry landscape.

What to watch

In the near term, observers should monitor how manufacturers respond to the ongoing memory shortages and whether they can stabilize prices. The performance of major players like Apple and Samsung, which have managed to maintain stable prices, will be crucial in shaping market trends. Additionally, any changes in consumer demand or shifts in technology adoption could further influence shipment numbers.