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Skyrocketing memory prices starting in 2025 are expected to drive a double-digit decline in global smartphone production in 2026, reshaping the market landscape. Leveraging their strong financial positions and high-end market focus, Apple and Samsung are expanding their market shares against the overall downtrend. In contrast, Chinese brands (HOVX), which traditionally compete on high cost-performance ratios, have seen their costs multiply and are forced to drastically cut production to preserve cash flow. Furthermore, Huawei is aggressively capturing market share by relying on its mid-to-high-end positioning and strong ecosystem, further squeezing its peers. Consequently, the overall market share of Chinese brands has dropped significantly, marking a pause in their decade-long expansion.
The surging AI server demand for low-power memory has triggered a severe capacity squeeze. Smartphone brands have lost their procurement bargaining power and are facing high cost pressures. To navigate these structural changes, manufacturers must adjust retail pricing and accelerate hardware-software integration to reduce memory reliance, breaking through in this era of high costs.
In mid-March, Samsung released its 2Q26 quotes ahead of schedule, with price hikes far exceeding market expectations. TrendForce believes this move is primarily aimed at accelerating downward revisions in the consumer end-market to free up production capacity for high-margin and strategic products. The recent softening of spot prices reflects the inability of consumer products to absorb these high costs, resulting in cutbacks to production plans and channel sell-offs to clear inventory. However, the overall reality of the memory supply shortage remains unchanged.
1Q26 Mobile DRAM contract prices were fully finalized in mid-March, with the QoQ increase being the most moderate among all applications. However, to maintain a profitability balance across different applications, TrendForce believes that suppliers are highly likely to initiate a pronounced "catch-up price hike" for smartphones in 2Q26. Under extreme cost pressure, Chinese brands have, in a rare move, begun retroactively raising the retail prices of older models, while non-Chinese majors are facing a similarly severe test in their end-device pricing strategies. Overall, a further downward revision of the total global smartphone production volume for 2026 is virtually inevitable.
AI demands and chip upgrades drive smartphone storage growth despite high costs. Brands raise base specs, making large capacities the new standard.
Mobile DRAM revenue hit new highs driven by surging contract prices, confirming a seller-driven super cycle. Major manufacturers shifting capacity to AI applications has tightened supply, allowing CXMT to expand in mature nodes. Looking ahead, sharp price hikes will boost supplier profits, but high costs are forcing smartphone brands to cut production, leading to a market of rising prices and shrinking volumes.
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Propelled by surging contract prices, Mobile DRAM revenue broke the $10 billion mark in 4Q25, a quarterly jump of over 30%. Entering the off-peak 1Q26, while bit demand is expected to contract, the significant hike in contract prices should still drive revenue to new highs. In terms of market structure, a highly concentrated "Big Four" landscape has formed, comprising Samsung, SK hynix, Micron, and China’s CXMT. Meanwhile, Taiwan’s Nanya and Winbond have seen revenue surge as major players exit the low-density market, though their overall market share remains limited.
Global smartphone production showed moderate growth in 2025, with Samsung and Apple tying for the top spot in market share. However, driven by sharply rising memory prices, overall production volume is projected to see a significant downward revision in 2026. Brands will experience polarization based on their differing product portfolios. Overall, the memory price supercycle will be the key variable reshaping the global smartphone market landscape in 2026.
The 1Q26 DRAM price rally is led by Server and PC applications, while a compensatory price increase for smartphone LPDRAM cannot be ruled out for 2Q26. With conservative NAND Flash capacity expansion and market inventory at low levels, conditions remain favorable for continued price increases in 2Q26. Although continuous sharp increases in memory prices have caused a decline in demand for consumer end-products, the overall memory market is expected to remain in shortage, underpinned by strong demand for AI servers. Simultaneously, impacted by significantly rising manufacturing costs, the reshuffling of the smartphone market will accelerate, with high-end brands standing to benefit relatively more.
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