The pattern is documented in a new GlobalData report, "AI-Driven RAMageddon Triggers First Wave of Smartphone Price Hikes – Further Increases and Fewer Choices Loom." GlobalData tracks the memory market across both AI infrastructure and consumer devices and identifies the AI buildout as the mechanism linking data-centre investment to higher phone prices.
AI infrastructure companies are not just buying more memory; they are signing multiyear commitments at premium prices. That locks in factory capacity and steers chipmaker investment toward the DRAM and NAND configurations that serve AI workloads, which carry higher margins than the variants used in consumer devices. Phone makers then face a smaller and more expensive supply pool.
Google raised Pixel 11 prices while simultaneously cutting base RAM in the Pro models from 16GB to 12GB, illustrating the dual squeeze. The economics are most punishing at the low end: a memory cost increase that is manageable on a $1,200 flagship can erase the margin on a $200 phone entirely.
Amanda Mitchell, Senior Analyst, Telecoms Practice at GlobalData, said: "Price hikes are only one way phone makers are responding to rising memory costs. Trimming specifications is another, and the economics become most punishing at the low end of the market. The pressure is also creating clear winners and losers: memory makers are reporting record numbers as limited supply and higher prices lift revenue and profits, while device makers compete for scarce chips and risk dampening consumer demand as higher prices arrive alongside lower specifications and threaten lower-end models."
Carriers absorb some of the pain through longer instalment plans, trade-in credits, and device-as-a-service offers, but those mechanisms reduce monthly payments rather than total cost or underlying supply constraints.
Meaningful relief depends on new production capacity, but the timelines are long and the investment is largely directed at AI demand rather than consumer devices. Samsung expects memory supply to remain tight through 2028. Micron's first New York fab is not expected to begin production until 2030.
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