There is a disturbing trend extensive through the smartphone industry, and it’s hitting consumers harder. Every other flagship device launched in 2026 has seen significant price increases, like ₹3,000, ₹10,000, some even jumping by ₹20,000. But here’s is twist: it’s not just premium devices feeling the pinch. Vivo’s T4 series saw hikes of ₹1,500 to ₹2,000. Oppo’s A-series? it also has same story. Realme, Samsung, and Xiaomi are all following suit. The iQOO 10, which launched at ₹31,900, is now priced at ₹36,900. These aren’t new releases getting pricier due to better specs. These are existing phones, many of them budget and mid-range models that ordinary people rely on.
While flagship owners might absorb the shock, phones in the ₹10,000 to ₹40,000 range are getting hammered the hardest. This is where most Indians shop, and this is where the crisis truly bites. So what’s driving this unprecedented price surge? The answer might surprise you: artificial intelligence. Your smartphone is essentially an assembly of components from various manufacturers. Samsung or BOE makes the display, Samsung or Sony provides the camera sensors, and Snapdragon or MediaTek supplies the processor. But two critical components, RAM and storage, come from a tiny group of suppliers.
RAM (DRAM) runs your apps, whether that’s 8GB, 12GB, or 16GB. Storage (NAND flash) saves your photos, videos, and files, typically ranging from 128GB to 512GB. Three companies, Samsung, SK Hynix, and Micron, control 97% of the world’s DRAM supply. This oligopoly situation creates a massive problem when priorities shift. Here’s the harsh reality: when these companies sell RAM to smartphone makers, they might earn ₹10 profit per chip. But when they sell high-bandwidth memory (HBM) to AI data centres, they pocket ₹1,000 per chip. These specialised chips are ten times faster and ten times more expensive. Given the choice, which customer would you prioritise?
The situation has become so extreme that Micron completely shut down Crucial, its consumer-focused division that made affordable RAM and SSDs. Samsung Electronics has even refused long-term supply contracts with Samsung’s mobile division. That’s right, Samsung won’t sell to Samsung. That’s how desperate the situation has become. The evidence is everywhere. RAM prices have more than doubled year-on-year and are expected to increase another 50% in 2026. If you check Amazon for 8GB RAM right now, major brands like Crucial, Corsair, and Samsung are entirely out of stock. What modules are available? An 8GB stick that cost ₹1,800 in September now sells for ₹5,500, a staggering 300% increase in just months. AI data centres have grown so desperate that they’re buying consumer-grade RAM and SSDs in bulk, creating shortages that ripple through the entire supply chain. This isn’t a temporary blip. This is a fundamental shift in how memory manufacturers do business.
The immediate impact is noticeable higher prices and limited availability. For example, the iPhone 17 base variant is already out of stock in India. Many devices has higher storage variants have vanished from shelves. But the long-term consequences could reshape the entire industry.
Flagship devices are typically enjoying its 25-30% profit margins, by enabling the manufacturers some cushion when component costs rise. Budget devices operate on razor-thin 5-10% margins. When component costs jump by ₹2,000, a flagship can absorb ₹500-800 of that increase. A budget phone must pass the entire cost to consumers.
According to Realme India’s CMO Francis Wong, this is the worst price crisis since smartphones were invented. His advice? Buy now if you need a phone, because next year will be even more expensive, and some companies won’t have phones to sell at all. Pushing things further, the Indian rupee has hit all-time lows against the dollar, now hang around ₹89 per USD, while the Chinese yuan has strengthened. Combined with component shortages, we’re looking at 20-30% price hikes across the board. A ₹15,000 phone could become ₹19,500. That ₹25,000 device you’ve been eyeing? Try ₹32,500.
Laptop manufacturers face similar challenges. HP’s CEO has warned that laptops will either come with more expensive RAM or manufacturers will downgrade to older DDR4 memory or ship with less RAM altogether. The next budget laptop might only have 8GB instead of 16GB.
Larger companies like Samsung and Apple have massive supply agreements, meaning RAM and storage makers will prioritise them. Smaller manufacturers will struggle to secure inventory, potentially leading to consolidation or even shutdowns of Indian smartphone brands.
What’s the Timeline?
Understanding the timeline requires looking at both AI companies and suppliers. The major AI players, Google, OpenAI (backed by Microsoft), Anthropic (backed by Amazon), and Nvidia, have enormous financial resources. OpenAI alone is valued at $500 billion, ten times that of Infosys. These companies are locked into multi-year data centre construction deals. OpenAI has contracted with Samsung and SK Hynix for chip supplies through 2029. Nvidia and SK Hynix are building a joint data centre scheduled for completion in 2027. Samsung will supply the majority of Google’s RAM needs throughout 2026.
On the supplier side, Samsung’s revenue has doubled this quarter compared to 2025, and SK Hynix is at an all-time high, with 2026 already sold out. Both parties are profiting handsomely. Neither cares about smartphones, laptops, or PCs right now. All indicators point to this crisis continuing through 2026 and possibly into early 2027.
What This Means for You
If you need a buy phone, buy before March 2026, prices will only climb higher. And must important thing is to avoid 1TB or 512GB variants; they’ll be prohibitively expensive. Stick with base storage models and use cloud storage services, which are now free for some users. Consider last year’s models as new phones launch, older ones are getting significant discounts on Amazon and Flipkart. Since those phones won’t be produced anymore, companies are clearing inventory.
Wait for the sale seasons, with reduced demand in 2026, retailers will need to move inventory, creating opportunities for deals. This isn’t smartphone manufacturers’ fault; they’re caught in the middle of a supply crisis driven by AI’s insatiable appetite for cutting-edge memory. It’s a phase that will last one to two years. The key is staying informed and making smart purchasing decisions that protect your wallet while this storm passes.
