Rising memory prices weigh on consumer markets
Global smartphone and notebook production is expected to decline in 2026 as rising memory prices and a weak macroeconomic environment weigh on consumer demand, according to market research firm TrendForce.
In its latest report, TrendForce highlighted that ongoing inflation and geopolitical tensions are contributing to a sluggish consumer electronics market. At the same time, the memory industry has entered a robust pricing upcycle, pushing up overall system costs and prompting brands to raise retail prices, which further suppresses demand.
Smartphone production forecast cut
TrendForce has revised its 2026 smartphone output forecast down to a 2% year-on-year decline, compared with its previous projection of a 0.1% increase. Notebook production is similarly expected to shrink by 2.4%, compared with an earlier estimate of 1.7% growth. The research firm warned that further reductions may occur if memory supply-demand imbalances worsen or retail prices rise beyond expectations.
The surge in smartphone memory costs in 2025 has been driven primarily by rising DRAM prices. Contract prices for DRAM in the fourth quarter are projected to increase more than 75% year-on-year. Given that memory accounts for 10–15% of a smartphone’s bill of materials (BOM), the overall unit cost of devices has risen by 8–10% in 2025.
TrendForce expects that DRAM and NAND Flash prices will continue to climb in 2026, potentially increasing BOM costs by an additional 5–7% or more. Lower-end smartphone models, which have thinner profit margins, are likely to see reduced production volumes, while prices across all segments could rise as brands seek to maintain profitability. Smaller smartphone manufacturers may struggle to secure sufficient memory supply, potentially accelerating industry consolidation in favor of larger brands.
Notebook market faces “triple challenge”
Notebooks are also expected to face significant pressure next year. Memory currently constitutes 10–18% of a notebook’s BOM and is projected to exceed 20% in 2026. If brands pass on these costs, retail prices could rise 5–15%, particularly affecting budget and mid-range segments. Consumers may delay replacements or turn to used devices, while even high-end users could opt for lower-tier configurations.
TrendForce summarised the notebook market’s outlook as being confronted with three major challenges: rising BOM costs, increased pressure from distribution channels, and declining demand. Brands will need to carefully manage product specifications, inventory levels, and channel incentives to mitigate the negative impact on sales and profits.