Global smartphone industry faces structural downturn due to memory chip crisis and AI shift
The global smartphone industry is experiencing a severe structural downturn, with Q2 2026 shipments falling 11% year-over-year to their lowest level since 2013, according to Counterpoint Research. The crisis is driven by a geopolitical and corporate shift in the semiconductor sector, where manufacturers have prioritized high-margin AI data center infrastructure over consumer electronics components. This has caused prices for DRAM and NAND Flash memory to balloon, making budget and mid-tier smartphones structurally impractical to produce at historical price points. OEMs are responding by hiking prices, extending device lifecycles, and delaying launches. The impact is particularly severe in India, where retail prices have risen by up to ₹7,000 due to component shortages and rupee depreciation against the US dollar. Major Android brands like Samsung, Vivo, Oppo, Xiaomi, and OnePlus are all affected. The article suggests the crisis may persist through end of 2026.
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Global smartphone industry faces structural downturn due to memory chip crisis and AI shift
The global smartphone industry is experiencing a severe structural downturn, with Q2 2026 shipments falling 11% year-over-year to their lowest level since 2013, according to Counterpoint Research. The crisis is driven by a geopolitical and corporate shift in the semiconductor sector, where manufacturers have prioritized high-margin AI data center infrastructure over consumer electronics components. This has caused prices for DRAM and NAND Flash memory to balloon, making budget and mid-tier smartphones structurally impractical to produce at historical price points. OEMs are responding by hiking prices, extending device lifecycles, and delaying launches. The impact is particularly severe in India, where retail prices have risen by up to ₹7,000 due to component shortages and rupee depreciation against the US dollar. Major Android brands like Samsung, Vivo, Oppo, Xiaomi, and OnePlus are all affected. The article suggests the crisis may persist through end of 2026.