Memory shortage: Market researchers expect the end of affordable notebooks
More expensive devices, declining sales, fewer entry-level models: The memory crisis is expected to hit the PC and smartphone market hard in 2026.
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The memory shortage caused by the AI hype will severely impact the PC and smartphone market, according to Gartner's forecast. The market researchers expect PC sales to fall by 10.4 percent in 2026 compared to the previous year. For smartphone sales, they anticipate a decline of 8.4 percent.
“This is the steepest contraction in device shipments witnessed in over a decade,” explains Ranjit Atwal, Senior Director Analyst at Gartner. “Higher prices will noticeably limit the range of available devices, prompting many buyers to use their existing devices for longer. This will fundamentally alter previous upgrade cycles.”
Price spiral continues
Gartner does not yet see an end to the cost spiral. Prices for RAM (DRAM) and SSDs are estimated to increase by up to 130 percent by the end of 2026. Consequently, PCs are expected to become 17 percent pricier on average, and smartphones 13 percent more expensive compared to 2025.
On the buyer side, market researchers expect private and business customers to postpone renewals due to increased costs and use their existing devices for longer. For business customers, the usage period is expected to increase by an average of 15 percent, and for private consumers by 20 percent. For smartphones, buyers would then rather opt for refurbished or used models.
Entry-level PCs disappear
The segment of affordable entry-level devices is expected to be particularly affected. The costs for memory are noticeable for manufacturers precisely in this segment – for notebooks and complete PCs, they are expected to account for 23 percent of total material costs in the future, instead of the previous 16 percent. “This sharp increase removes vendors' ability to absorb costs, making low-margin entry-level laptops nonviable,” says analyst Atwal.
In his assessment, the segment of entry-level PCs under $500 will disappear by 2028. He likely means mainly notebooks, which, unlike desktop or mini-PCs, do not require a display, battery, or keyboard. The market penetration of AI PCs, i.e., those with dedicated neural processing units (NPUs), is also expected to be further delayed.
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Gartner may have even estimated conservatively regarding the share of memory in total costs. Manufacturer HP reported on Wednesday when announcing its Q1 2026 business figures that the share of PC material costs this year is expected to be around 35 percent. This represents a doubling compared to the previous quarter. HP also expects costs to continue to rise, with the company anticipating the biggest impact in the second half of the year.
How long will this continue?
The memory crisis has now reached almost all types of memory, from DDR5 modules in desktop PCs and LPDDR5X for notebooks and smartphones to SSDs and HDDs. According to industry voices like Phison CEO Khein-Seng Pua, the shortage could continue for quite some time. According to internal forecasts from his company, the imbalance between supply and demand for memory chips could well last until at least 2030. This would mean memory will remain scarce for several more years, and manufacturers will be able to dictate prices.
The reason for the memory crisis is the enormous demand from hyperscalers for their AI data centers. The concept of supply and demand is practically being undermined: normally, high prices would lead to a decrease in demand, which should then stabilize prices again. However, hyperscalers are currently buying up everything available, regardless of cost. At the same time, it takes years for memory manufacturers to complete the construction of new plants and begin mass production.
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