Smartphone Prices Set to Rise by Year-End as Memory Chip Costs Surge Worldwide

From October to December 2025, affordable and mid-range smartphone prices may increase due to rising memory chip costs. Manufacturers are prioritizing AI and data center chips over phone memory, leading to reduced supply and higher production expenses.

New Delhi: The prices of affordable and mid-range smartphones in India are likely to increase between October and December of this year.

The reason for this is the rapid rise in the prices of memory chips used in smartphone manufacturing. According to reports, the supply of memory chips is continuously decreasing, which has increased the production costs for mobile companies.

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AI and Data Centers Drive Up Demand for Memory Chips

A report by TrendForce indicates that major chip manufacturing companies are now shifting their focus from smartphone memory chips to producing High-Bandwidth Memory (HBM) used for AI servers and high-performance computers.

Due to the increasing popularity of AI technology, the demand for HBM in data centers is rapidly increasing, leading to a decline in the production of smartphone memory.

Advance Chip Purchases Disrupt Market Balance

To cope with this situation, many smartphone companies have already started making advance purchases of chips to avoid future supply shortages.

However, this has further disrupted the demand and supply balance in the market, leading to an expected increase of more than 10% in the prices of memory chips like LPDDR4X this quarter.

Experts Say AI Servers Are the Real Reason

Parv Sharma, an analyst at Counterpoint Research, says that this shift is due to the increasing needs of AI servers and cloud technology. HBM chips offer chip manufacturers higher profits compared to smartphone chips, so companies are now investing more in this area.

NAND Flash Storage Also Becoming More Expensive

It's not just memory chips; the prices of NAND flash storage, which is used to save data in every smartphone, are also increasing. According to TrendForce, a 5 to 10% increase in NAND flash prices can be expected this quarter.

Smartphone Companies Face Two Options

Experts believe that due to rising costs, smartphone companies will have only two options: Either they reduce the features of their devices, or they pass on the increased costs directly to consumers.

This means that in the coming months, budget smartphones will no longer be as affordable as they once were. Consumers may now have to pay more for the same features.

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Smartphones will become more expensive due to increasing technological demands. In the age of AI, data centers, and cloud computing, where technology is advancing rapidly, its impact is now beginning to be felt in the pockets of ordinary consumers.

By the end of 2025, a significant increase in the prices of budget smartphones can be expected, which is set to become the new reality of the mobile market.