Prices of DRAM and NAND Flash have skyrocketed, with memory accounting for up to 20% of smartphone manufacturing costs.

The Bill of Materials (BoM) for smartphones is projected to increase by approximately 25% by 2026 , primarily due to the ongoing DRAM crisis. Faced with rapidly escalating costs, some manufacturers are even considering bringing back 4GB of RAM on their budget models to cut expenses.

 

Not only DRAM, but NAND Flash has also become significantly more expensive. According to a market research firm, the price of LPDDR RAM for mobile devices has increased by more than 70% , while storage memory costs have risen by up to 100% . With many manufacturers preparing to launch 2nm chipsets later this year, smartphones using the new SoCs along with current generation DRAM and NAND Flash are predicted to significantly impact consumers' wallets.

DRAM currently accounts for over 20% of smartphone manufacturing costs.

An independent analysis shows that no company can escape the DRAM crisis. Samsung's co-CEO once admitted that no company can avoid this shortage . Even Apple – a trillion-dollar corporation – is said to have had to take drastic measures, including sending executives abroad for extended stays to negotiate directly with DRAM manufacturers like Samsung and SK hynix, demonstrating the severity of the problem.

 

According to Omdia, based on data shared by leaker Ice Universe, smartphone manufacturers will have to accept a 70% surcharge for DRAM and a 100% surcharge for NAND Flash compared to before. Meanwhile, TrendForce reports that memory, which previously accounted for only about 10–15% of smartphone production costs , has now increased to over 20% .

Furthermore, high-end chipsets are becoming increasingly expensive. Chips like the Snapdragon 8 Elite Gen 6 Pro are predicted to cost over $300 , while the Snapdragon 8 Elite Gen 5 is already around $280 per chip . As a result, smartphone manufacturers will be forced to choose between cutting specifications or passing the increased costs on to consumers , which means a risk of declining sales.

This is clearly a slippery slope and almost unavoidable. However, not all companies are affected equally. NVIDIA once stated that it was almost 'immune' to the DRAM crisis because it paid in advance to secure supply , in order to serve the AI ​​wave. Ironically, such actions are considered one of the reasons why the shortage has worsened.

If you're hoping this crisis will end soon, then you should probably prepare yourself: the DRAM shortage is projected to last at least until Q4 2027 .