DRAM Shortage Could Kill Budget Phones in 2027 — And Hit Gaming PC Prices Too

Jordan Ellis05/07/2026Updated 12/07/20265 min read

DRAM Shortage Could Kill Budget Phones in 2027 — And Hit Gaming PC Prices Too

Budget smartphones priced under $400 could all but disappear from shelves by 2027, and the same memory crunch driving that collapse is already pushing up prices for gaming PCs, laptops and prebuilt systems. Research firm IDC has warned that the global memory shortage, fuelled almost entirely by AI data centre demand, is not a temporary blip but a structural reallocation of chip manufacturing capacity that could persist well into 2027.

Omdia Projects a 22% Drop in Sub-$400 Phone Shipments

According to Omdia’s May 2026 forecast, cited by iTechPost, smartphones priced below $400 will see a 22% decline in shipments throughout 2026, as surging DRAM and NAND component costs make low-end devices increasingly unprofitable to manufacture. The knock-on effect is dragging down the wider market too, with the overall global smartphone market on course for a 12% year-over-year decline, with the dramatic drop in sub-$400 shipments being the primary driver behind that broader contraction.

The pain is worst at the very bottom of the market. For phones priced at $99 or less, memory now eats up as much as 64% of the total bill of materials. Omdia principal analyst Zaker Li put it bluntly, saying “Memory costs have become a serious burden for mid-to-low-end smartphones,” adding that “the situation will worsen as memory prices continue to rise in the coming quarters.”

Meanwhile, premium handsets are actually growing, since manufacturers with fatter margins can absorb the extra component cost. Omdia’s data shows smartphones priced above $400 are forecast to grow by 5.7% in 2026, with manufacturers increasingly shifting their attention toward premium devices where component costs are easier to manage. To cope at the low end, Android brands are cutting corners elsewhere, with more Android brands expected to opt for downgraded components in their budget models, including cheaper display panels, scaled-back camera configurations and last-generation chipsets.

Samsung, SK hynix and Micron Are Chasing AI Margins

The root cause traces back to a single decision by the world’s three biggest memory makers: build for AI data centres, not consumer gadgets. As IDC explains it, the voracious demand for HBM by hyperscalers such as Microsoft, Google, Meta and Amazon has forced Samsung Electronics, SK Hynix and Micron Technology to pivot their limited cleanroom space and capital expenditure towards higher margin enterprise-grade components. The firm calls it a zero-sum trade-off, since every wafer allocated to an HBM stack for an Nvidia GPU is a wafer denied to the LPDDR5X module of a mid-range smartphone or the SSD of a consumer laptop.

Micron’s own leadership has confirmed the squeeze is real. Business chief Sumit Sadana told CNBC that demand has “far outpaced our ability to supply that memory and, in our estimation, the supply capability of the whole memory industry.” Micron says it is building new fabs in Boise, Idaho, though those plants are expected to start producing memory only in 2027 and 2028. A separate fab in Clay, New York, according to Sadana, isn’t expected to come online until 2030.

The scale of the shift explains why relief looks so far away. TrendForce data cited by CNBC shows average DRAM memory prices were expected to rise between 50% and 55% in the quarter compared with the previous one, a jump its own analyst called unprecedented. Samsung and SK hynix, for their part, have reported soaring profits from the same dynamic that is squeezing everyone else.

Gaming PCs and Prebuilts Face 15-20% Price Hikes

Phones aren’t the only devices caught in the crossfire. IDC’s own analysis warns that PC vendors are signalling broad price increases as cost pressures intensify into the second half of 2026, with Lenovo, Dell, HP, Acer and ASUS confirming 15-20% hikes and contract resets as an industry-wide response. Larger manufacturers with bigger inventories and supplier leverage are expected to weather the storm better than smaller ones, and IDC specifically flags who will feel it worst: white box and lower-tier vendors, including DIY systems, oftentimes built by gamers.

Tom’s Hardware’s reporting on the same Omdia research frames the wider consequence starkly, describing it as the global AI memory squeeze pricing cheap phones out of existence. The same underlying commodity — DRAM and its mobile LPDDR variants — sits inside gaming laptops, desktop memory kits and the memory controllers used in current-generation consoles and handhelds, meaning a shortage that starts in smartphones doesn’t stay contained to smartphones.

For everyday consumers already struggling with the sub-$400 handset segment, the outcome is a straightforward trade-off between price and features. Facing unviable economics and weakening buyer demand, smartphone vendors are quietly initiating a tactical retreat from the bottom of the market, scaling back or entirely abandoning low-end handsets to focus on more lucrative price brackets.

What It Means for Gamers Shopping in NZ and Australia

New Zealand and Australian buyers already pay a premium on imported PC components and prebuilt gaming systems once freight, currency conversion and local distributor margins are factored in. A global DRAM shortfall of this magnitude, layered on top of that existing markup, is unlikely to be quietly absorbed by regional retailers if the 15-20% hikes IDC is flagging for major PC brands flow through as expected.

Anyone in the region planning a PC upgrade, a new gaming laptop or a budget handheld in the near future may want to treat the current window as the calmer stretch before AI’s appetite for memory chips reshapes what “budget” hardware even looks like across every category, from phones to consoles.