Fueled by the artificial intelligence (AI) boom, memory prices are expected to surge 130% this year from a year earlier. As a result, PC prices are forecast to rise 17% and smartphone prices 13%, while shipments are projected to fall by nearly 10%.
According to Gartner, a global market research firm, as of the 27th, prices of DRAM and SSDs (solid-state drives) combined are expected to climb 130% year over year by the end of this year.
Amid the ripple effects of "chipflation," global shipments are expected to drop 10.4% for PCs and 8.4% for smartphones from a year earlier.
With memory shortages driving up PC and smartphone prices, "chipflation" is set to intensify throughout the year, concentrating market demand on premium lineups.
Ranjit Atwal, a senior director analyst at Gartner, said, "This year's PC and smartphone shipments will be at the lowest level in more than a decade," adding, "Rising prices will narrow the range of products consumers can choose from and extend device lifespans, altering upgrade cycles."
As PC purchase expense rises sharply, the average lifespan of corporate PCs is expected to increase 15% and that of consumer PCs 20% by the end of the year. Delayed replacements could raise concerns about broader security vulnerabilities and greater complexity in managing aging devices.
The share of memory in PC manufacturing costs is projected to rise from 16% last year to 23% this year. With AI PC prices climbing, the point at which AI PCs reach a 50% market penetration is also expected to be pushed back to 2028.
Atwal, the senior director analyst, said, "As it becomes harder for manufacturers to absorb the burden of expense increases themselves, the business case for low-end notebooks with thin margins will weaken," adding, "The market for budget PCs under $500 (about 700,000 won) will disappear by 2028."
Device price hikes stemming from rising memory prices are expected to hit the budget smartphone market particularly hard. Consumers are more likely to choose refurbished or used models, or keep their existing smartphones longer. Premium smartphones with higher margins, by contrast, are expected to be relatively less affected.
Gartner predicted that "in 2026, budget smartphone buyers will exit the market five times faster than premium buyers."
Soaring memory prices are expected to reshape the revenue structure of the PC market. Accordingly, PC makers are more likely to opt for reduced shipments to preserve profitability rather than sacrifice margins to capture price-sensitive demand.
Atwal, the senior director analyst, said, "Overall, device manufacturers and distribution channels will face a critical window in the first half of 2026 to optimize prices and defend margins," emphasizing, "Proactive measures are needed before component price increases squeeze profitability after the second quarter."