AI chips could raise the price of smart devices by up to 8%
The trend is predicted to hit low-end manufacturers the hardest.
Analyst firm IDC predicts that the AI industry’s huge pressure on chip supply could, in a worst-case scenario, lead to a price increase of up to 8% for smartphones and personal computers, with budget device makers such as Xiaomi and Oppo being hit hardest.
If you’re looking to buy a budget Android smartphone in 2026, especially from value-oriented manufacturers like Xiaomi or Oppo, industry analysts have some bad news.
A new IDC report predicts that the huge pressure on DRAM production, an essential ingredient in all smartphones, will continue into 2026. Thanks to the AI boom, chip production that would otherwise be reserved for smartphones, personal computers, or other consumer electronics will now increasingly be used in AI data centers.
IDC thinks that smartphone average selling prices could rise by 3% to 5% in the moderate scenario, or by 6% to 8% in its pessimistic scenario. IDC thinks that the total smartphone market could contract by 2.9%, while in its pessimistic downside scenario, it could contract by as much as 5.2%.
The boom in demand for AI chips in consumer technology is not expected to be a major casualty, while the PC market is also expected to be hit hard. IDC estimates that average PC sales prices could increase by 4% to 6% in a moderate scenario, and by 6% to 8% in a pessimistic scenario. The largest vendors with the highest total sales are likely to be best protected from rising RAM prices, while smaller, regional “white box” vendors are likely to be hit harder.
Console gamers are also set to feel the negative impacts of the AI boom. Nintendo-focused analysts predicted earlier this month that spiraling DRAM prices could mean high production costs for Switch 2 cartridges will continue to limit which games see a fully physical release.
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