Smartphone shipments hit 13-year low amid memory crisis

Global smartphone shipments fell 11% year-over-year in the second quarter of 2026, marking the lowest second-quarter volume since 2013 as a prolonged memory chip shortage continued to drive up component costs and squeeze manufacturers worldwide.reuters+1

AI Demand Fuels the Crunch

The downturn stems from an unprecedented reallocation of memory manufacturing capacity toward artificial intelligence infrastructure. Major technology companies have absorbed vast shares of global DRAM supply for data centers, leaving smartphone and PC makers struggling to secure components. The shortage, which began reshaping the market in late 2025, has pushed DRAM prices up sharply, with costs for smartphone-grade LPDDR memory tripling by mid-2026.idc+2

IDC's most recent forecast projects worldwide smartphone shipments will decline 13.9% for the full year to 1.09 billion units — the steepest annual contraction in smartphone history. Counterpoint Research has issued similar projections, calling 2026 volumes the lowest since 2013. "The deepening memory shortage crisis remains the dominant force behind the record 14% drop this year," said Nabila Popal, Senior Research Director at IDC.idc+2

Premium Brands Weather the Storm

Samsung retained its position as the world's largest smartphone vendor in Q2 with a 24% market share, while Apple ↘ 0.52% climbed to a record 20% share for the quarter. The two companies have leveraged their scale and premium pricing power to absorb higher component costs more effectively than rivals.instagram+2

Chinese vendors bore the brunt of the decline. DIGITIMES projected Chinese enterprise smartphone shipments would fall 17.8% year-over-year in Q2, as brands including Xiaomi, OPPO, and Vivo cut production targets amid surging RAM costs. Budget and mid-range devices have been hit hardest, as manufacturers find entry-level models increasingly uneconomical to produce.digitimes+3

No Relief in Sight

Analysts expect the shortage to persist into late 2027, when additional memory fabrication capacity is projected to come online. In the meantime, average smartphone selling prices have climbed to record levels — IDC forecasts a full-year ASP of $550, up $100 from 2025. The geopolitical backdrop, including rising oil prices and transportation costs tied to the U.S.-Iran conflict, has added further pressure on manufacturers.caixinglobal+3