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.
The industry enters a 2026 Super Cycle driven by DRAM and Enterprise SSDs. Despite a slowdown in consumer electronics, AI remains the primary growth engine. Low inventory levels and the transition to high-value products like HBM4 will maintain a seller-dominated market with double-digit price growth extending beyond 2026.
Driven by robust demand for AI servers and high-performance computing, the memory market has entered a super-cycle of price hikes starting from 2H25. Escalating memory costs are forcing brands to raise end-device prices and scale back low-end models to cope with cost pressures. Against this backdrop, the year-on-year decline in global smartphone production for 2026 could widen to approximately 15%, or potentially even higher, under a pessimistic scenario. However, given the absence of signals indicating a halt in price increases and persistent supply tightness, most brands are choosing to maintain their established procurement volumes with suppliers to secure resource allocations. It is noteworthy that this wave of memory price increases is driving up the retail prices of various electronic devices, further evolving into a broader risk of consumer electronics inflation.
The upward trend in memory prices persists into 1Q26, with no clear signals of a cessation appearing so far for the year. Amidst this super-cycle of price hikes, although smartphone brands have struggled to maintain operations through retail price adjustments and product mix optimization, total production volumes have shifted to a year-on-year decline, with the magnitude of the drop continuing to widen. It is worth noting that despite the pessimistic outlook, brands remain hesitant to breach the Long-Term Agreements (LTAs) established with suppliers, aiming to avoid facing tighter supply and even higher procurement costs in the future.
Since the second half of 2025, the smartphone market has been trapped in a closed cycle: tight memory supply and skyrocketing costs have forced up end-device prices, subsequently weakening demand. To cope with this adverse environment, smartphone brands are expected to revise production volumes downward and adjust product specifications and price bands. While brands have not yet significantly lowered their production targets for 1Q26, they are bound to scale back subsequent production plans if the decline in demand exceeds expectations.
Starting in 3Q25, memory prices are expected to experience a significant surge, with this upward trend projected to persist through at least 1Q26. This rally is substantially inflating Bill of Materials (BOM) costs and forcing increases in end-device pricing. Consequently, TrendForce has further downgraded its forecast for 2026 global smartphone production volumes; should costs continue to rise or economic conditions deteriorate, the year-on-year decline may expand further. Future market trends will be subject to rolling adjustments based on brands' strategies regarding margin absorption, price fluctuations of other components, the extent of specification downgrades, and price sensitivity across various segments. Notably, entry-level products currently face the most severe pressure and risk of elimination.
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.
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