DRAM Shortage Will Cause 'Seismic Shift' in Smartphone Market, But Apple Will Be Less Affected
by Horace Dediu
Catastrophic drop predicted
Global memory scarcity will cause a 13 percent drop in smartphone sales in 2026, according to IDC. DRAM is in short supply because AI companies are buying huge quantities of high-bandwidth memory (HBM) for servers in data centers, and manufacturers are prioritizing HBM instead of the memory used in consumer devices.
IDC says that the global memory supply has been drained into next year, putting smartphone makers in a tough spot. Prices have spiked because there's not enough memory to meet production needs, which will cause a smartphone market "crisis like no other."
Smartphone makers are expected to ship 1.1 billion devices in 2026, down from 1.26 billion in 2025.
"The tariffs and pandemic crisis seem a joke compared to this," said IDC Senior Research Director Nabila Popal. "The smartphone market will witness a seismic shift by the time this crisis is over -- in size, average selling prices and competitive landscape. We don't expect the situation to ease up until mid-2027, at least."
Cheap Android smartphones will be impacted most heavily by increasing DRAM costs, but Apple is well-positioned to avoid major impact because it focuses on more expensive, premium devices. Apple has more profit margin to work with and is better able to secure available DRAM supply.
IDC says that even when the DRAM shortage is resolved, memory prices are not expected to return to 2025 levels, so there could be a permanent shift toward higher-priced smartphones.
Source: MacRumors
NB: A recurring theme: when things get tough the tough get going.
During the last earnings call, Tim Cook said that memory price increases had a "minimal impact" on Apple's gross margin during the 2025 holiday quarter, guiding margins for the next quarter to record highs, suggesting *less* impact tough stating that it is expecting a "bit more of an impact".
Again, the impact might be so severe on the low end that supply will disappear and vendors might exit the business. The likely outcome could be a steep increase in Apple market share though perhaps not a big boost in volumes. The volume will recover and shoot higher still in following years as the market adjusts to fewer competitors. Thus, a consolidation would favor Apple disproportionately.
3 comments
vhs ·
Am I missing something? AFAIK the Apple SoCs have the DRAM directly on the chip, together with the CPU/GPU/NPUs. Which means they don't buy DRAM from the manufacturers, but they have TSMC bake the DRAM onto the AXX chips. So that at least iPhones (and iPads) wouldn't be affected at all, right?
deemery ·
Well, there's also the persistent flash memory. I believe both are in short supply. But yeah, RAM in SoC will be a new price advantage for Apple, since they're not competing for discrete RAM chips.
The more likely potential risk would be TSMC retargeting NVIDIA production over Apple production. I'm sure Apple and TSMC have agreements to prevent this.
vhs ·
Yes, if the bottleneck is wafer space, then Apple will eventually be effected, too. TSMC uses the same wafers for every customer of a certain node. But if it's more of a packaging issue, then the shortage should hit mostly the more horizontally integrated players.
Flash is 3D node, stacked vertically. Uses a different node from DRAM and SoC, with relatively large structures (~10nm), so shouldn't compete for node access, only for wafers.