AI Data Centers Starve Budget Smartphones of Memory Chips

The artificial intelligence industry is causing a shortage of memory chips needed by the smartphone industry even as AI features become part of the latest mobile devices, Bloomberg News reported Monday (March 2).

These two trends are topping the agenda at the mobile industry event MWC Barcelona 2026, according to the report.

The demand for memory chips from AI data center operators has left device makers facing higher prices and a shortage of chips that could slash smartphone sales by 13% this year, the report said. The shortage is hitting entry-level devices especially hard, as smartphone makers shift their resources toward premium products, per the report.

Among the AI-enhanced phones displayed at the event, Bloomberg highlighted Honor’s Robot Phone, which features an articulating arm with a camera.

According to an Honor press release, the Robot Phone uses “embodied AI” to better interact with its surroundings and capture images.

It was reported in January that the global AI boom is beginning to alter the economics of smartphones and other consumer electronics by causing memory components to be diverted toward large-scale AI systems under long-term supply agreements.

RAM prices in some consumer segments have risen by 20% to 30% year over year, reducing long-standing expectations of steady declines, and constraints in memory supply have led manufacturers to place greater emphasis on paid memory upgrades.

Counterpoint Research said Friday (Feb. 27) that the supply-driven memory crunch will be the primary driver of a downturn in global smartphone shipments that will last “well into 2027.”

This downturn is expected to cause a 12% year-over-year decline in shipments that will leave the year’s total below 1.1 billion units, which would be the lowest annual volume since 2013, the company said.

“The impact is expected to continue through [the second half of 2027], as it will take several quarters for memory supply expansion to materialize,” Counterpoint Research Principal Analyst Yang Wang said in a Friday press release. “Lower-end smartphones are likely to be affected the most, especially as LPDDR4 supply is shrinking faster than expected. OEMs are already responding with launch delays, streamlined portfolios and specification trade-offs.”

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