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.

Key Highlights

• Memory price increases in 1Q26 are expected to surpass those of 4Q25, with no signs of the rally stalling for the remainder of the year. Smartphone production performance for 2026 is likely to face continued downward revisions.
• Memory now accounts for a significantly higher proportion of smartphone BOM (Bill of Materials) costs. This has intensified the pressure to raise end-device prices and adjust the product mix across high, mid, and low-end segments.
• Brands are temporarily holding off on downward revisions to their 2026 LTA procurement volumes. Driven by concerns over continued price hikes and supply shortages, they are prioritizing the securing of resources now to avoid future quota restrictions.
• Brands with product portfolios concentrated in the mid-to-low-end segments, or those highly dependent on a single market, are bearing the brunt of this current surge in memory prices.
• The super-cycle of memory price increases is evolving into broader consumer inflation, driven by the rising retail prices of various consumer electronics.

Table of Contents

1. Key Points
2. Updates on Smartphone Market
   • Smartphone Memory Price Forecast
   • Smartphone Production Forecast

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