AI chip demand to drive up affordable smartphone prices through 2027

Industry analysts warned in 2024 that a shortage of memory chips will make affordable smartphones harder to buy and more expensive through 2027. The shortage is happening because AI data centres now use more than half of the world's memory chip production. Chips for AI computers are being made first, so fewer chips are available for phones. Memory parts can make up 60% of the cost to build a cheap phone, so budget phones are hit hardest. Analysts expect 22% fewer phones under $400 to be available by 2027, and average prices could rise by around 7%. Some phone makers may also reduce storage or remove features to keep costs down.