Memory prices have soared 4 to 5 times within a year, making IT devices more expensive but with poorer specifications, and this problem is expected to continue until 2028.
Runar Bjerkhofde, senior analyst at Omdia, stated that current memory component prices are 4 to 5 times higher than about a year ago. Consequently, memory now accounts for over half of material costs in some budget devices, compared to roughly 10 to 15 percent before prices surged due to AI-driven demand. He added that such a situation is unprecedented. With costs rising sharply, manufacturers have chosen the option that impacts them least: reducing component specifications.
Ben Hatton, an analyst at CCS Insight, noted that some smartphone brands have started reverting to 4G models because they require less memory than equivalent 5G devices. Other brands have reduced storage capacity, downgraded cameras, or used older processors from Qualcomm and MediaTek instead.
This impact is uneven across the market because high-end laptops still require sufficient memory and processing power to justify their price points. However, in the lower-end market, reducing component quality is clearly more cost-effective for manufacturers.
Hatton pointed out that consumers seeking smartphones or laptops under $500 (approximately 16,400 baht) are highly likely to receive devices with noticeably reduced performance. This situation is squeezing the mid-range market, as manufacturers try to push consumers to pay more for higher-margin products that can absorb the sharply increased component costs.
Signs of this shift have already emerged. Bjerkhofde cited Samsung’s Galaxy A16 4G, an affordable smartphone launched about 18 months ago, which remains the company’s best-selling model by unit count in Europe.
At the same time, Xiaomi serves as another notable example, with its shipments in the first half of 2026 dropping approximately 25 percent year-over-year, while revenue declined only about 5 percent due to a strategic focus on higher-priced products.
According to data from Counterpoint Research and Omdia, Xiaomi’s shipments in Q2 2026 totaled 31.2 million units, a 26 percent decrease from the previous year. It was the most affected brand among the top five smartphone manufacturers, as over half of its shipments are devices priced below $200 (about 6,600 baht).
Naturally, higher costs for new devices have indirectly pushed users toward refurbished models, but in many cases, two- to three-year-old flagship phones are priced similarly to new devices with significantly lower specs.
The main cause of the shortage is massive demand for memory and advanced components from large cloud providers rapidly building AI infrastructure. Major memory manufacturers have shifted production toward high-end products these clients pay premium prices for. Expanding production capacity is slow because new factories take two to three years to build and tend to be designed for high-spec GPUs that offer better returns, rather than basic components.
Analysts from both firms agree this problem will persist for several years. Bjerkhofde expects prices will not drop significantly within the next 18 months, while Hatton forecasts pressure lasting at least until mid-2028. They describe this as a structural and nearly systemic issue that is changing how people will use and consume technology overall going forward.