‘Rising memory prices to drive smartphone production down by up to 15 percent’

Global smartphone production could fall by 10 percent in 2026 to approximately 1.135 billion units due to sharply rising memory prices.

Smartphone production will fall between 10 and 15 percent this year, according to a forecast by TrendForce. According to the research firm, memory prices show no signs of decreasing for the time being. As a result, the gap between higher retail prices and what consumers are willing to pay is growing. This puts pressure on end-user demand and manufacturers’ production volumes.

Memory price increase

As an example, the market research firm points to a common configuration of 8 GB RAM and 256 GB storage. Estimated contract prices for that memory in the first quarter of 2026 were nearly 200 percent higher than a year earlier.

While memory used to represent 10 to 15 percent of production costs, that share is now rising to 30 to 40 percent. According to TrendForce, many brands will have to raise their retail prices or adjust their product portfolios to protect margins.

Differences between brands

In a scenario where production falls by 15 percent, TrendForce analyzed the impact on the eight largest smartphone brands. Samsung, the market leader and also a major memory supplier, can absorb some of the costs through its vertical integration. Nevertheless, TrendForce also expects lower volumes there due to weaker market conditions.

According to the report, Apple is better positioned to absorb higher memory costs. The company sells a relatively high number of premium models and can more easily pass price increases on to its customer base.

Brands that focus heavily on entry-level models, such as Xiaomi and Transsion, are more vulnerable. Their target markets are price-sensitive, making it harder to pass on higher costs. This could lead to larger production cuts in 2026 if memory prices remain high.

Additional pressure on the Chinese market

Competition is increasing in the Chinese market. Brands like vivo, Oppo, Xiaomi, and Honor are facing additional pressure from Huawei. Huawei is focusing on expanding its HarmonyOS ecosystem and employing flexible pricing strategies. TrendForce expects that in the negative scenario, Huawei will see the smallest production adjustment and may even achieve growth.

Furthermore, according to TrendForce, smartphones today offer sufficient functionality for most users. As a result, replacement cycles are becoming longer and the need to upgrade is decreasing. Even with stabilizing memory prices, the firm does not expect a fundamental turnaround in demand in the short term.