Memory currently accounts for a much larger proportion of the total component cost (BoM) of smartphones compared to a few years ago. In 2020, memory accounted for about 8% of component cost in a high-end device like iPhone 12 Pro Max. By September 2025, this ratio had increased to about 10% in iPhone 17 Pro Max (12GB DRAM and 256GB NAND).
Meanwhile, in today's high-end Android phones configured with 12GB-16GB RAM and 512GB-1TB memory, memory can account for 20% or more of the total component cost due to the continuous increase in memory prices. This change reflects not only higher component costs but also the increasing demand for artificial intelligence (AI) on devices, advanced games and increasingly complex image processing processes.
At the same time, the rapid expansion of data centers is also tightening supply. As memory vendors focused on HBM and DDR5 for servers, the capacity of older generation DRAM (DDR4, LPDDR4) has decreased. Meanwhile, memory prices have increased, starting from older generation DRAM.
With the price increase of LP4, memory for smartphones also began to become more expensive. Major vendors are limiting the expansion of production capacity, so the low-end and mid-range smartphone segments, which previously benefited from stable memory price reductions, are under the greatest pressure.
In this context, global smartphone shipments are expected to decrease by 6.1% compared to the previous year in 2026, while processing chip (SoC) shipments for smartphones are expected to decrease by 7% compared to 2025. Chinese OEMs are likely to be most severely affected, while Apple and Samsung have a better position thanks to integrated supply chains and continuous shifts to the high-end segment.
Among SoC providers, UNISOC faces the strongest decline due to dependence on the shrinking low-end 4G market. Conversely, Google is expected to experience the strongest growth, supported by differences in artificial intelligence (AI) and expansion of operations beyond the US and Japanese markets.
Samsung's launch of the Exynos 2600 2nm further strengthens the company's vertical strategy, while MediaTek and Qualcomm face opposite results as high-end platforms compensate for weaknesses in large product segments.
Demand for memory and storage continues to rise as smartphones switch to using LPDDR5X/LPDDR6 and UFS 4.x, increasing chip production costs and creating barriers for devices for the mass market. Original device manufacturers (OEMs) in the mid- and low-end segments are reacting by cutting down the number of designs, lowering specifications, or delaying product launches, while high-end brands focus on optimizing configuration rather than compromising performance.
Looking ahead, the smartphone market is expected to stabilize again in the second half of 2027 or early 2028. Until then, the industry will have to balance costs, performance and innovation.
