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In 4Q25, memory price increases for Chinese smartphone OEMs surpassed those for US OEMs, prompting suppliers to implement "catch-up" price hikes for US clients in 1Q26 to balance regional price disparities. While initial estimates suggest absolute pricing for Chinese clients may remain slightly lower than for US clients, the possibility of expanded hikes due to delayed or combined negotiations with 2Q26 remains. This wave of memory price increases has far exceeded expectations, significantly driving up smartphone BOM costs. Under this immense pressure, brands are compelled to raise prices on new devices, scale back promotions, or accelerate the EOL of older models to maintain operational quality and cash flow.
Memory price surge continues into 1Q26, pushing BOM cost to a critical point. Brands freeze price cuts and downsize specifications, facing severe sales challenges.
Mobile DRAM revenue surged due to peak season demand and soaring contract prices, intensified by supplier bidding wars. While smartphone production saw a slight short-term upward revision, rising memory costs are eroding low-end brand profitability, threatening future output. The accelerated shift to high-end specifications continues to drive prices upward amid supply tightness.
Soaring memory prices increase system costs and retail prices, hurting the consumer market. TrendForce thus lowered 2026 shipment forecasts for smartphones, notebooks, and game consoles. Game console makers may abandon price cuts due to costs, shifting to high-price, profit-preserving strategies.
In 3Q25, the smartphone industry benefited from the traditional peak season and the launch of new device models. Smartphone production registered both QoQ and YoY growth. However, moving into 4Q25, the sharp increase in memory costs is expected to significantly impact the profitability of low-end smartphone brands, potentially causing these brands to make downward revisions in their quarterly production volumes. Additionally, the trend of increasing differentiation between the high-end and low-end segments continues. Therefore, the successful implementation of AI features and effective cost control measures will be critical for competitive advantage.
Global smartphone shipments in 2025 are expected to see only slight year-on-year growth, with the Chinese market accounting for nearly one quarter of the world’s total. This market also exhibits a high level of brand concentration, with the top five brands collectively capturing over 80% market share. Looking ahead to next year, the Chinese market may face a decline as the effects of subsidies diminish or are eliminated.
Revenue of mobile DRAM was driven by the increase of contract prices in 3Q25, and accomplished a QoQ growth of nearly 30% in market value. Revenue is looking to continue ascending in 4Q25 after another significant hike of contract prices. With that said, suppliers may shift their resources to product lines of higher profitability or better strategic positions under constraints of capacity, which would further tighten the supply of mobile DRAM and subside the scale of delivery, thus generating negative interferences to the market value of mobile DRAM.
Memory is entering a strong upward cycle, driving a significant rise in overall device BOM cost. To maintain profit margins, brands are adjusting their high-, mid-, and low-tier product mixes and implementing tiered hikes on retail prices. Soaring memory prices, coupled with a weak macro economy, create dual headwinds that will suppress production and shipment momentum for consumer electronics in 2026.
CXMT, through expansions and yield improvement, has once again taken the crown for YoY growth of output bit for 2026. The supplier’s major product, mobile DRAM, highly corresponds to DRAM products required by China, the largest production base of smartphones in the world. China’s subsidy policy, as well as the shortage of LPDDR4X generated by production shift among South Korean and US suppliers, have facilitated a swift expansion of CXMT’s market share.
The 4Q25 contract negotiations for mobile DRAM used in smartphones are expected to conclude only after mid-November. Conversely, quotes for NAND Flash products are relatively certain. Due to production capacity crunch, the price differences of mobile DRAM products for different applications are shrinking. Looking ahead, the structural shortage of the whole memory market is likely to persist until the end of 2026.
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