If you’re planning to buy a new smartphone anytime soon, brace yourself. A massive price hike is on the way, and the problem isn’t the usual inflation or component shortages. This time, the blame falls squarely on AI giants like OpenAI and Google. Their explosive demand for high-end memory chips has pushed the global supply chain into chaos, and the ripple effect is about to hit your wallet hard. Analysts now warn that phone prices could climb 35–45%, purely because memory has become too expensive to source.
What exactly is happening right now?
The memory chip market is on fire, and not in a good way. Prices of key components like DRAM and NAND have spiked by as much as 50% in just a few months. These are the chips that store your photos, keep apps running, and let your phone multitask without collapsing. A report from Jiemian News says major smartphone makers like Xiaomi, OPPO, and Vivo are now slamming the brakes on fresh chip purchases because suppliers, like Samsung, Micron, SK Hynix have suddenly jacked up prices.
Some smartphone brands are down to less than two months of NAND supply. Others have under three weeks of DRAM left. The chaos worsened in October when Samsung quietly stopped listing prices for DDR5 chips, triggering panic buying and a 25% price jump in a single week.
Why is this happening?
The simple answer is AI companies like OpenAI & Google
The same memory chips inside your phone are the ones powering AI servers and giant data centres. And those customers are willing to pay 30% more per chip without blinking. Chipmakers are simply following the money and diverting supply to AI companies with deeper pockets, leaving smartphone manufacturers scrambling for leftovers.
To make matters worse, big suppliers have also been intentionally cutting production to push prices up even further. With output throttled and AI demand exploding, the supply chain has gone into severe shortage mode.
How this affects your next phone or laptop
Memory isn’t a small part of a device — it can account for up to 30% of the total cost of a smartphone or laptop. With chip prices soaring, manufacturers are being forced into a corner. The end result for consumers is ugly: expect devices to become significantly more expensive.
Mid-range and flagship phones could jump $15–$70 (₹1,200–₹6,000). Higher-storage models like 512GB and 1TB could become luxury-tier. Laptops, which use even more RAM and NAND, are likely to see similar increases. Another possibility? Companies might quietly cut storage options to keep prices “stable,” essentially giving you less for the same money.
What happens next?
Don’t expect relief anytime soon. Even if Samsung or SK Hynix decide today to expand production, new fabs take 1–2 years to become operational. Meanwhile, the AI boom continues to grow uncontrollably, and memory demand for training and running large models is only rising.
Unless a giant like Apple uses its buying power to force better pricing, chipmakers hold all the cards. And everyone else namely the end user like you and I, will have to absorb the cost.
