AI is gobbling up the world’s memory chips, sending smartphone prices to record highs, report says

The report estimates that the average selling price of smartphones will rise 14% this year to an all-time high of $523. Qilai Shen/Bloomberg/Getty Images AI See all topics Facebook Tweet Email Link Threads Link Copied! Follow Taipei, Taiwan  —  A global shortage in memory chips sparked by artificial intelligence has dealt a “tsunami-like shock” to the smartphone industry, pushing prices to all-time highs, according to a new report. A worsening shortfall of memory components is expected to put phone manufacturers out of business and make smartphones more expensive than ever this year, according to the paper by the International Data Corporation, a Boston-based technology analysis firm. “What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain, with ripple effects spreading across the entire consumer electronics industry,” said Francisco Jeronimo, who leads research on mobile devices at the IDC, in a Thursday report. The report estimates that the average selling price of smartphones will rise 14% this year to an all-time high of $523, while manufacturers will no longer be able to make phones that cost less than $100. The IDC also predicts that 2026 smartphone sales will see a record decline of 12.9% to 1.12 billion units, the lowest level in more than a decade. This particular semiconductor crisis stems from a boom in artificial intelligence, and the subsequent rush to build data centers that rely heavily on memory ch...