The firm highlighted that electronics supply chains worldwide have recently faced a shortage of legacy memory chips, as manufacturers increasingly focus on high-end memory designed for AI semiconductors. This shift has driven up costs for entry-level smartphones, particularly those priced below $200.
“What we are seeing now is the low end of the market being impacted most severely, with bill-of-materials costs increasing by 20% to 30% since the beginning of the year,” said MS Hwang, Research Director at Counterpoint.
Chinese smartphone brands, including Honor Device and Oppo, are expected to be particularly vulnerable due to tight profit margins in the entry-level segment. In contrast, major players such as Apple and Samsung are considered better positioned to withstand the challenges in the coming quarters, Counterpoint senior analyst Yang Wang noted.
The report also highlighted a broader industry trend: Nvidia’s recent move to adopt smartphone-style memory chips in AI servers is expected to significantly boost server memory demand. Each AI server requires far more chips than a single smartphone, potentially causing memory prices to double by late 2026, Counterpoint said.
Earlier this month, IDC also forecast a decline of 0.9% in global smartphone shipments in 2026, citing similar concerns over rising memory chip prices.