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Smartphone Market Set to Shrink 13% Due to Memory Chip Crisis, IDC Says

Vlad Savov
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⚡ Quantum Brief
The global smartphone market will shrink 12.9% in 2026 due to a severe memory chip shortage, per IDC, calling it an unprecedented crisis worse than prior forecasts. AI-driven demand for advanced memory chips has depleted global supplies, extending shortages into 2027 and disrupting electronics production across industries. Smartphone manufacturers face existential threats as the chip crunch undermines their business models, forcing potential delays or cancellations of new device launches. The revised IDC forecast marks a sharp downward adjustment from earlier projections, signaling deeper-than-expected disruptions in the tech supply chain. Electronics sectors beyond smartphones—including PCs, servers, and IoT devices—are also at risk as memory allocation prioritizes AI infrastructure over consumer hardware.
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000The AI Race:The global smartphone market will contract 12.9% in 2026 because of the unprecedented memory chip shortage, marking “a crisis like no other,” according to researcher IDC.The new forecast, a dramatic revision down from earlier estimates, gives the latest accounting of the ongoing memory crunch that’s affecting every corner of the electronics industry. The demand for advanced memory to power artificial intelligence tasks has drained global supply until well into next year and now jeopardizes the business model of many smartphone makers.

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Source: Bloomberg Technology

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