Memory Shortage Threatens to Make 2026 Devices More Expensive and Less Capable

The tech industry faces its most severe memory shortage since its inception, with PC and smartphone makers warning that 2026 devices will be both more expensive and less capable as AI ambitions consume available memory supplies.

According to researchers at IDC, the memory market crisis has worsened dramatically since December, forcing the firm to revise its market outlook downward. The PC market is now expected to decline by 11.3 percent in 2026—a 26 percent worse projection than just two months ago. The smartphone market faces an even steeper 12.9 percent drop, more than double the 5.2 percent decline IDC had predicted as a worst-case scenario in December.

"This is perhaps the biggest challenge the industry has faced since its inception," said Nabilia Popal, IDC's senior research director for global consumer devices, during a roundtable discussion. "This is not just a temporary situation. This is going to result in a structural reset of the entire industry, in terms of size, in terms of competitive landscape, of the product mix and also on the price."

Price Hikes and Feature Reductions

The memory shortage is already manifesting in higher prices and reduced capabilities. DRAM prices have skyrocketed, with Dell's chief operating officer Jeff Clarke reporting that prices have increased nearly 5.5x over the past six months to $2.39 per gigabit. NAND flash prices have similarly surged, up nearly 4x to $0.20 per gigabyte.

HP revealed that memory now accounts for 35 percent of the cost of materials needed to build a PC, up from 15-18 percent in the previous quarter. The company expects memory prices to increase 100 percent sequentially in the next quarter and has already raised PC prices accordingly.

Industry-Wide Impact

Lenovo's PC boss Luca Rossi confirmed the trend, stating that the company will raise average selling prices for PCs in 2026 as available units drop. "At the moment, we are modeling a mid-single-digit decline for the units. But that decline will be offset by a higher ASP (average selling price) and likely a favorable product mix," Rossi told investors.

Device makers are pursuing several strategies to cope with the shortage:

• Reducing memory in lower-end devices
• Optimizing software to use less memory
• Sourcing from Chinese suppliers previously avoided for geopolitical or technical reasons
• Encouraging consumers to keep devices longer or buy used/refurbished units

AI Demand Drives Crisis

The shortage stems from massive AI infrastructure buildouts by major cloud providers. The top four cloud service providers are projected to spend $600 billion on AI infrastructure this year, requiring DRAM and NAND at levels 70 percent higher than last year.

Gartner researchers reported that some memory types have doubled or quadrupled in price since last year, with DRAM and NAND flash used in PCs and phones expected to rise another 130 percent by the end of 2026.

Timeline for Recovery

IDC's Jeff Janukowicz warned that the memory shortage reflects a "structurally tight environment" rather than a temporary disruption. The firm expects the challenging conditions to persist through 2026 and likely into 2027 before memory prices stabilize.

The shortage is expected to hit PC vendors in the second quarter, with smaller vendors struggling most to obtain supplies. Unit volumes are projected to "fall off dramatically" as manufacturers grapple with constrained memory availability.

For consumers, this means the next generation of devices will likely offer less memory at higher prices, potentially slowing the traditional upgrade cycle as users hold onto existing devices longer. The tech industry's rapid innovation pace may be forced to slow as fundamental hardware constraints reshape product development strategies.