Smartphones may cost more soon because memory is now one of the most expensive parts to put inside a device

Smartphones

• AI demand is driving memory chip prices up faster than expected
• Memory costs now make up a larger share of flagship phone production expenses
• Suppliers prioritize DDR5, cutting cheaper memory options for budget devices.

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The global memory chip market is getting more expensive, faster than most people expected, and it’s all because of artificial intelligence. A new report from Counterpoint Research says the memory market has entered a “Hyper Bull” phase, meaning prices are rising aggressively, even more than the last big spike seen in 2018.

The chips we are talking about here are DRAM and mobile memory like LPDDR. These are the tiny components that help your phone, laptop, and servers remember and process data quickly. Now, with AI tools being used everywhere and companies building bigger and smarter servers to support AI, the demand for memory has hit a point where suppliers have more power than ever before.

Counterpoint’s tracker predicts that memory prices will jump 40 percent to 50 percent in the last quarter of 2025. Then another 40 percent to 50 percent rise is expected in the first quarter of 2026, followed by about a 20 percent rise in the second quarter. This means the cost is not going up once, it is going up repeatedly.

To understand how sharp this is, look at this example: the price of 64GB RDIMM, a memory module used in servers, went from $255 in Q3 2025 to $450 in Q4 2025. The next target is $700 by March 2026. Some experts now believe that hitting $1,000 per module this year is not out of the question. If that happens, the price per gigabit of memory could reach $1.95. Back in 2018, the highest it reached was $1.00 per gigabit. So we are now talking about almost double that peak.

This change is also affecting the cost of making everyday gadgets. Memory used to be a smaller part of the total cost of building phones. In 2020, memory made up about 8 percent of the iPhone 12 Pro Max’s parts cost. In 2025, memory crossed 10 percent of the iPhone 17 Pro Max’s parts cost. And for flagship phones that come with 16GB or 24GB RAM and 512GB or 1TB storage, memory can now take 20 percent or more of the total cost. That is a massive chunk for one component.

Meanwhile, suppliers like Samsung and SK hynix are moving their production away from older, cheaper memory tech like LPDDR4 and eMMC. They are focusing on DDR5 memory for servers because it brings higher profits. This shift is reducing the availability of cheaper memory parts, especially for older or budget devices.

Counterpoint also says that even though companies are planning to spend more money to increase production capacity in 2026, it will take time for supply to match demand. DRAM production may grow 24 percent year on year in 2026, but that still might not be enough for quick relief.

In short, memory chips are getting expensive because AI needs more of them, suppliers are changing what they make, and supply will take time to catch up. The price hikes are real, fast, and tech buyers across the world are feeling it already.