The global AI boom is the main reason your next smartphone or PC is likely to be more expensive.
It all starts with a massive demand for a special type of memory called HBM (High Bandwidth Memory), which is essential for training AI models. Memory giants like Samsung and SK hynix are shifting their production lines to focus on these highly profitable AI chips.
This strategic shift creates a direct causal chain of events. First, it severely tightens the supply of standard DRAM and NAND memory used in everyday consumer devices. Second, with scarcity comes surging prices; TrendForce reported that contract prices for some types of memory nearly doubled in the first quarter of 2026 alone. Third, device makers, or OEMs, facing a much higher Bill of Materials (BOM), have little choice but to pass these costs on to shoppers.
This isn't just a theory; we're seeing it play out in real-time. Analysts at firms like Gartner and IDC warned months ago that this memory crunch would lead to higher device prices and a historic drop in sales. Now, an executive at JD.com, a major Chinese retailer, has confirmed that these price hikes have been happening since March, dampening consumer demand just as the country's huge "618" mid-year shopping festival approaches.
For consumers, this means facing tougher choices. The higher prices are expected to lead to a significant drop in unit sales. People may delay upgrading their devices, opt for models with less RAM or storage, or even turn to the refurbished market. It's a clear example of cost-push inflation impacting consumer behavior in a price-sensitive market.
- HBM (High Bandwidth Memory): A high-performance memory used for powerful computing tasks, especially in AI, which is currently taking up manufacturing capacity.
- OEM (Original Equipment Manufacturer): A company that produces devices (like smartphones or PCs) that are marketed by another company. Examples include Samsung or HP.
- BOM (Bill of Materials): A list of all the components needed to manufacture a product. A higher BOM means it costs more to make the device.