If you’re planning on buying a PC, laptop, or cell phone in the coming months, a word of advice for you before Christmas: Buy now, not later. Prices are likely set to spike in the new year—due to a shortage of memory chips.
Memory and storage for DRAM and NAND, two major types of computer memory, have seen costs rise between 30 and 40%, year-on-year—in some cases, they’re even doubling. This impacts the bill of materials (BOMs), or the cost of individual items to make, PCs, and especially low-end smartphones, where margins are thin and the proportional cost increase is more severe.
The sudden spike in memory prices is part of a decades-long pattern of semiconductor supply cycles—but this one is coming unusually fast, driven by unexpected demand from big tech companies building data centers for AI training and inference.
“There is an occasional cycle of supply shortages or some high demand bridges coming in once or twice a decade—it goes about 40 years back,” says Runar Bjørhovde, research analyst at Canalys. He estimates that we’ve experienced seven “steep” cycles so far.
What’s different now, he says, is the speed and the cause. “This has developed really, really quickly.”
As a result, the foundries manufacturing chips and memory are prioritizing the high-performance compute chips needed for data centers, as well as higher-paying customers like Microsoft, Google, and Amazon Web Services, because scarce raw materials and limited capacity force them to funnel resources to the most profitable segments.
“As memory components become more limited and more expensive, manufacturers face increasing pressure to raise prices,” says Anthony Scarsella, research director at IDC, which tracks cell phone shipments and sales. “While some OEMs will inevitably be forced to raise prices, others will adjust their portfolio towards pricier models with higher margins to absorb some of the memory impact on BOM,” he says. “Next year will be a challenging time for the industry.”
Because of that, the average price of a smartphone will rise to around $465 next year, up from $457 in 2025 according to IDC data, even as total shipments in 2026 dip slightly because some buyers are priced out or delayed by component shortages. The biggest squeeze is expected in the low-to-mid range Android segment, where customers are most sensitive to price rises and vendors have the least room to absorb higher memory costs. On PCs, the picture is similar. “A PC makes up about 15 to 18% of the bill of materials … that goes in putting together a PC,” says Bjørhovde of the memory and storage share.
