San Jose, January 19, 2026
If you've been following the smartphone supply chain at all lately, you've probably heard the same complaint over and over: memory prices are out of control. According to TrendForce's newest quarterly smartphone outlook released today, that pain started getting really serious in the second half of 2025 and isn't going away anytime soon.
The combo of tight DRAM and NAND flash supply + prices that keep climbing has already forced most brands to bump up the sticker prices on their latest flagships and mid-rangers. Consumers aren't thrilled, sales momentum has slowed in many markets, and the whole industry is feeling the squeeze.
At the moment, the major players haven't slashed their Q1 2026 production schedules in any dramatic way. But just about everyone expects the hangover from those price increases to hit hardest starting in April–June next year. That's when the weaker sell-through finally shows up in the shipment numbers and factories start running noticeably lighter.
What's a little counter-intuitive is how brands are behaving on the component-buying side. Even though the mood is cautious overall - and a handful of companies have already trimmed their 2026 annual targets behind closed doors - almost no one is cutting back on memory orders. The thinking seems to be: "Lock in as many chips as we can right now at today's crazy prices, because next quarter they might be even crazier… or there might not be enough to go around at any price." It's basically a defensive stockpiling move.
That strategy, though, is starting to create its own problems for some vendors. A few brands went all-in on big production runs at the tail end of 2025 to chase year-end numbers. At the same time, government subsidies in China (which used to move a lot of units) have lost most of their punch, and the freshly price-hiked 2025/early-2026 models simply aren't flying off shelves the way people hoped. Result? Finished-goods inventory levels are creeping up in warehouses across Asia.
If the next couple of months don't bring a meaningful pickup in retail velocity, TrendForce thinks at least some brands will start pulling back on future orders as early as late March or April 2026 - basically getting ahead of what could become a really ugly inventory pile-up.
Looking at the bigger picture, the first six months of next year are shaping up to be a genuine "reset" period for the industry. Phone makers will almost certainly respond by quietly downgrading camera sensors here, using slower storage there, trimming RAM on base models, and rejigging MSRPs again so they can actually make money (or at least stop losing quite so much) on each device.
Those kinds of tweaks don't translate into lower production figures overnight, though. Existing channel stock has to move first, assembly lines need retooling time, and suppliers usually want some advance notice before you tell them to build way fewer units. Because of all that inertia, TrendForce believes the heaviest downward revisions to output plans will land somewhere between Q2 and Q3 2026 rather than right at the beginning of the year.
Put it all together - still-sluggish global economy, consumers pinching pennies harder than usual, memory prices that refuse to come back to earth - and you get the agency's updated full-year forecast: global smartphone shipments in 2026 are now expected to drop about 7% compared with 2025. That's a meaningful step down from the -2% contraction they were projecting back in November.
Whether that 7% figure holds, or whether we see another downward revision later this quarter or next, will come down to three big variables everyone is watching closely:
- How much further NAND and DRAM spot prices actually rise (or - fingers crossed for the industry - finally start to ease)
- How much additional retail-price increase brands are willing to risk pushing through
- Whether mainstream buyers in key markets (China, India, North America, Europe) decide the new price tags are still worth it… or just decide to keep using last year's phone a while longer.
Right now the smart money seems to be betting on more turbulence ahead rather than a quick rebound. We'll know a lot more once the Chinese New Year sell-through data rolls in and the first proper Q1 numbers start leaking out in a few months.
