AI chip demand severely crowding out consumer electronics supply, $220 smartphones at risk of disappearing by 2027

The continued expansion of AI servers and data centers is significantly crowding out memory supply for consumer electronics. It is estimated that by the end of 2026, more than half of DRAM capacity will be allocated to AI computing, with the share potentially exceeding 60% in the future, leaving even less memory supply for consumer electronics like smartphones and PCs. The global DRAM market is highly concentrated, with Samsung Electronics, SK Hynix, and Micron controlling about 90% of supply. Since 2022, DRAM prices have surged up to 700%, with no clear signs of decline under continued AI demand. Experts point out that if DRAM remains in short supply, by 2027 memory and storage component costs could account for about 60% of total smartphone manufacturing costs, severely compressing brand profit margins. The approximately $220 budget smartphone may become unsustainable. Market research firm IDC also has a bearish outlook, expecting global smartphone shipments to fall to their lowest level since 2013.