IDC Says Global Memory Shortage Could Tank PC and Smartphone Sales in 2026

The market researchers at IDC warn that an “unprecedented” memory chip shortage could impact PC and smartphone sales in 2026, with surging prices and lower sales to end users.

“DRAM prices have surged significantly as demand from AI data centers continues to outstrip supply, creating a supply/demand imbalance,” IDC explains. “IDC was monitoring the memory situation as we prepared our November device forecasts, and we factored them into the update. The situation, however, has become more acute since publishing, and we feel it’s important we address the situation. Although we are maintaining our official forecasts as the situation is still evolving, we will offer here two downside risk scenarios that may play out in two critical markets: Smartphones and Personal Computers.”

IDC’s worry is that what we’re experiencing is not temporary but is instead a “potentially permanent, strategic reallocation of the world’s silicon wafer capacity.” In the past, devices like PCs and smartphones drove sales of DRAM and NAND flash memory. But now, hyperscale AI infrastructure providers have forced the world’s biggest memory makers to allocate as much capacity as possible for their “voracious” needs.

As a result, the global smartphone market, especially those companies that make Android phones, is under threat, IDC says: Memory represents 15 to 20 percent of the manufacturing cost of each device, and so device makers will have to raise prices, killing the market for affordable Android phones.

The PC market, meanwhile, faces “disruption” because of its historically low margins. PC makers will also have to raise prices by 15 to 20 percent, IDC says though the largest of them, like Lenovo, are better positioned to handle supply constraints. The biggest threat, oddly, could be to so-called AI PCs because they tend to come with more RAM than other PCs.

Now, IDC expects the smartphone market to shrink by 2.9 to 5.2 percent year-over-year (YOY) in 2026, while the average selling price could jump 3 to 8 percent. It also expects the PC market to contract by 4.9 percent YOY in 2026, compared to 2.4 percent in its previous forecast. The average selling price of PCs should go up by 4 to 8 percent depending on how things go.

“For consumers and enterprises alike, this signals the end of an era of cheap, abundant memory and storage, at least in the medium term,” IDC concludes. “The year 2026 is shaping up to be one in which technology becomes more expensive, driven by supply constraints rather than demand growth.”