Why Are Laptop and Phone Prices Rising in 2026? How AI Is Making Memory More Expensive

If you feel that smartphones and laptops have suddenly become more expensive, you are not imagining it.

In 2026, device prices have been under pressure from a combination of rising memory costs, semiconductor supply constraints, strong demand from AI infrastructure and, in India, a weaker rupee that makes imported components more expensive.

The most important factor, however, is something that is easy to overlook when buying a phone or laptop: memory.

DRAM and NAND flash are essential components in modern electronics. DRAM is used for working memory such as RAM, while NAND is widely used for storage such as SSDs and smartphone flash storage.

And the same semiconductor industry that supplies these components to phones and PCs is also supplying a rapidly expanding AI infrastructure market.

How Much Have Smartphone Prices Increased?

The latest Counterpoint Research data gives a useful indication of how unusual the current situation is.

According to Counterpoint's September 3, 2026 Global Smartphone Price Increase Tracker, average retail prices of existing smartphones globally had increased by 15% in 2026 so far.

India recorded an even larger increase of 21%, the highest among the markets covered in the report.

Counterpoint says more than 40% of smartphone models had experienced price increases in 2026, while new smartphone launches were, on average, 25% more expensive than their year-ago counterparts in its analysis.

That makes the current situation different from a normal annual price adjustment.

Why Is Memory Suddenly So Important?

A smartphone may look like a camera, screen and processor wrapped in a piece of glass and metal.

But underneath, it contains a large number of semiconductor components.

Two of the most important memory technologies are:

Every time a laptop manufacturer increases RAM or SSD capacity, it needs more memory components.

The same principle applies to smartphones.

And AI infrastructure requires enormous quantities of memory.

So What Does AI Have To Do With Your Phone?

This is the most important part of the story.

AI models are increasingly being trained and operated in large data centres containing thousands of processors and accelerators.

These systems require high-performance memory alongside their compute hardware.

One particularly important technology is high-bandwidth memory, or HBM.

HBM is designed to provide very high memory bandwidth for demanding workloads such as AI acceleration.

As AI infrastructure investment has expanded, demand for HBM and other high-performance memory products has increased.

IDC says this has contributed to a shift in semiconductor manufacturing capacity toward higher-value memory products used in AI infrastructure, reducing the amount of capacity available for conventional DRAM and NAND used in consumer electronics.

This Is Not Because AI Is Inside Every Phone

There is an important distinction here.

The problem is not simply that smartphones now have AI features.

The bigger issue is that AI infrastructure is competing for semiconductor manufacturing capacity and memory supply.

A consumer buying a ₹20,000 smartphone is therefore indirectly affected by an investment cycle involving large data centres and AI computing infrastructure.

The phone and the AI server may be very different products, but they depend on overlapping parts of the semiconductor supply chain.

Why Can't Chipmakers Just Make More Memory?

Because semiconductor manufacturing capacity cannot be increased quickly.

Memory manufacturing requires extremely expensive fabrication facilities, specialised equipment, advanced processes and long investment cycles.

Manufacturers also have to decide how to allocate existing capacity among different products.

When a higher-margin product has stronger demand, shifting capacity toward that product can make economic sense.

IDC says memory supply growth in 2026 is expected to remain below historical norms, forecasting DRAM supply growth of approximately 16% year over year and NAND supply growth of approximately 17%.

That does not mean memory production is falling.

It means supply is not expanding fast enough relative to demand.

Why Does This Push Up Phone Prices?

Smartphone manufacturers have several choices when an important component becomes more expensive.

Manufacturers do not necessarily pass the entire increase to consumers immediately.

They can absorb part of it, renegotiate supply agreements, change specifications or reduce discounts.

But if component inflation persists, maintaining the same retail price becomes increasingly difficult.

Why Budget Phones Are Particularly Vulnerable

The effect is not necessarily the same across all smartphone categories.

Budget devices operate with relatively tight margins.

If memory costs increase significantly, a low-cost smartphone manufacturer has less room to absorb the additional expense without affecting profitability.

Counterpoint says price increases have been particularly significant in price-sensitive markets such as India, where low- and mid-range devices account for a large proportion of smartphone volumes.

This can create an unusual situation.

A ₹10,000 or ₹15,000 phone may experience greater percentage pressure than a premium smartphone because manufacturers have fewer margins available to absorb higher component costs.

Why Are Laptop Prices Rising Too?

The same memory problem affects PCs and laptops.

A modern laptop typically contains DRAM for system memory and NAND flash in the form of an SSD.

If both components become more expensive, the cost of producing the laptop increases.

IDC has warned that the memory shortage could create significant disruption for the PC market in 2026.

Its analysis says PC manufacturers have been facing increasing cost pressure and that industry-wide price increases could become significant as memory constraints continue.

The PC market is also dealing with other factors, including demand for AI-capable PCs and the replacement cycle following the end of Windows 10 support.

Are Laptop Prices Rising By 20%?

There is no single percentage that applies to every laptop.

Price changes depend on the model, memory configuration, storage capacity, processor, inventory position, manufacturer and retailer.

Recent industry reporting has indicated substantial increases in some laptop categories, but it would be misleading to say that every laptop has become 20% more expensive.

The safer conclusion is that memory and semiconductor cost pressure is pushing laptop manufacturers toward higher prices and fewer aggressive discounts.

Why Is India Being Hit Harder?

India has several characteristics that make the situation particularly visible to consumers.

1. A Large Price-Sensitive Market

A significant portion of India's smartphone market consists of entry-level and mid-range devices.

When component costs rise, manufacturers have less room to absorb those increases in lower-priced products.

2. Imported Components

India continues to rely heavily on imported electronic components and semiconductor inputs.

When the rupee weakens against the US dollar, dollar-denominated imports become more expensive in rupee terms.

3. Currency Pressure

Recent reporting has identified the weaker rupee as another factor contributing to higher landed costs for electronics in India. Mint reported that the rupee had weakened by roughly 11% against the dollar over the previous year in its August 2026 analysis.

4. Global Supply Constraints

India cannot completely isolate its consumer-electronics market from global semiconductor pricing.

If DRAM, NAND or other components become more expensive internationally, Indian manufacturers and importers can face higher costs as well.

It Is Not Just Memory

Memory is currently one of the most important factors, but it is not the only cost pressure.

Device prices can also be affected by:

• Processors and other semiconductors
• Display components
• Battery materials
• Camera components
• Storage
• Logistics and freight
• Currency movements
• Manufacturing costs
• Taxes and duties
• Retail margins

Recent Indian reporting has specifically pointed to semiconductor constraints, the weaker rupee, freight costs and broader supply-chain pressures as contributors to higher consumer-electronics prices.

Why Are New Phones Launching At Higher Prices?

There is another change consumers may notice.

Historically, smartphone manufacturers have often launched a new generation at a similar price to the previous generation while improving specifications.

The current memory environment makes that strategy harder.

Counterpoint found that new smartphone launches in 2026 were, on average, 25% more expensive than year-ago variants in its global analysis.

That does not mean every new phone costs 25% more.

It is an average across the models analysed.

Will Phones Start Offering Less RAM?

Possibly, and manufacturers are already adjusting specifications in some markets.

Counterpoint says OEMs are using several strategies to manage higher memory costs, including lower storage capacities and changes to camera configurations, alongside other product adjustments.

This creates an interesting reversal in the smartphone market.

For years, consumers generally received more RAM and storage for the same money.

Higher memory prices make that trend harder to maintain.

Could Phone Storage Become More Expensive Too?

Yes.

Storage in smartphones and SSDs is commonly based on NAND flash.

If NAND supply becomes constrained, storage costs can also rise.

That means the memory shortage affects more than just RAM.

A laptop with a 1TB SSD and 16GB RAM is exposed to both DRAM and NAND pricing.

A smartphone with higher RAM and storage capacity is similarly exposed.

Why AI Data Centres Need So Much Memory

Modern AI workloads are unusually demanding.

AI accelerators process very large datasets and model parameters, which creates substantial demand for memory bandwidth and capacity.

HBM is particularly important because it allows AI accelerators to access data at very high speeds.

As hyperscalers and other companies expand AI infrastructure, memory manufacturers have strong incentives to allocate manufacturing capacity toward these products.

IDC describes this as a structural shift in the memory market, with AI infrastructure changing the balance between consumer memory and higher-value enterprise memory.

Is AI Literally Taking RAM Away From Your Laptop?

Not in a literal sense.

A laptop's RAM chip is not being physically removed and installed inside an AI server.

The issue is manufacturing capacity.

The same global semiconductor ecosystem has finite wafer, fabrication and packaging capacity.

When manufacturers devote more capacity to HBM and other products for AI infrastructure, the supply dynamics for conventional memory can become tighter.

That can eventually show up in the price paid by a laptop or smartphone manufacturer.

Why Are SSD Prices Also Under Pressure?

NAND flash is the underlying technology used by many SSDs.

If NAND supply becomes tighter, SSD component costs can rise.

This matters for laptops because storage is a major part of their bill of materials.

It can also affect desktop PCs, gaming systems, external SSDs and other storage products.

What Happens If Manufacturers Don't Raise Prices?

Higher component costs do not always result in an immediate retail-price increase.

Manufacturers can use several strategies.

This is why consumers may see fewer dramatic discounts even when the official price of a device appears unchanged.

Are Premium Phones Also Getting More Expensive?

Yes, although the impact varies by market and manufacturer.

Counterpoint's data shows that premium-heavy markets have experienced smaller average price increases than more price-sensitive markets.

Its 2026 figures show China at 10%, Europe at 7% and the US at 5%, compared with India's 21%.

Premium manufacturers may also have stronger purchasing power, longer-term supplier relationships and greater ability to absorb component-cost changes.

But premium devices are not immune.

What Is Happening To Consumers?

Higher prices are already changing purchasing behaviour.

Counterpoint says consumers are responding by delaying upgrades, choosing lower-storage configurations and increasingly considering refurbished devices.

Indian market data also points toward increasing interest in refurbished smartphones as new-device prices rise.

Financial Express reported that India's refurbished smartphone market grew 13% year over year in the first half of 2026, while new handset sales declined 11%.

This is economically logical.

If a new phone becomes significantly more expensive while the improvement over the previous generation is relatively small, keeping an existing phone for another year can become more attractive.

Could This Change How Often People Upgrade Phones?

Yes.

Longer replacement cycles are one of the likely effects of sustained higher device prices.

Instead of upgrading every two years, some consumers may keep their existing phone longer.

The same can happen with laptops.

Businesses may also extend device lifecycles if replacement costs rise.

Will Laptop and Phone Prices Keep Rising?

There is no reliable single date when prices will return to previous levels.

IDC expects the memory shortage to remain a risk through 2026 and potentially into 2027. Other industry analysis has also suggested that supply constraints could remain significant for an extended period.

However, future pricing depends on several variables:

• New semiconductor capacity
• AI infrastructure demand
• HBM production growth
• DRAM and NAND supply
• Consumer demand
• Currency movements
• Inventory levels
• Manufacturer pricing strategies

Therefore, it would be too strong to claim that laptops and phones definitely will not become cheaper until a particular year.

What Could Make Prices Fall Again?

There are several possible paths to lower prices.

More Memory Production

If manufacturers add enough DRAM and NAND capacity, supply pressure could ease.

AI Memory Supply Expands

If HBM production grows sufficiently, manufacturers may have greater flexibility in allocating capacity across different memory products.

AI Infrastructure Demand Slows

A slower pace of AI infrastructure investment could reduce pressure on high-performance memory.

Consumer Demand Weakens

If consumers buy fewer devices because of higher prices, manufacturers may eventually have to use discounts to stimulate demand.

Currency Stabilises

For India, a more stable rupee could reduce some of the pressure associated with imported components.

Should You Buy a Phone or Laptop Now?

There is no universal answer.

If you genuinely need a device and the current price fits your budget, waiting purely for a dramatic price collapse may not be sensible given the current uncertainty around memory supply.

If your existing device works well, however, there is also no technical requirement to upgrade simply because manufacturers are launching new models.

For buyers who are flexible, refurbished or previous-generation models can become more attractive when new-device prices rise.

The important point is to compare the actual specification and street price, rather than assuming that a newer model automatically provides better value.

What Does This Mean For Laptop Buyers?

For laptops, pay particular attention to:

• RAM capacity
• SSD capacity
• Processor generation
• Upgradeable memory and storage
• Warranty
• Battery health for refurbished devices
• Actual discount from the previous selling price

A laptop with 16GB RAM and 512GB SSD may become more expensive simply because those components have become more expensive—not necessarily because the processor or display has improved.

What Does This Mean For Smartphone Buyers?

Smartphone buyers should look at the total configuration rather than focusing only on the processor.

The Bigger Story: AI Is Changing The Economics Of Consumer Electronics

The current memory shortage illustrates something broader about the technology industry.

AI is not only changing software.

It is changing demand for physical infrastructure.

AI data centres require processors, networking equipment, power infrastructure, cooling systems and enormous quantities of memory.

Those requirements compete for semiconductor manufacturing capacity with consumer electronics.

That means the economics of an AI boom can eventually reach ordinary consumers.

A person buying a smartphone does not need an AI data centre.

But the companies manufacturing the components inside that smartphone are operating in the same global semiconductor market.

Why This Could Be Different From a Normal Chip Cycle

The semiconductor industry has historically experienced cycles of shortage and oversupply.

When prices rise, manufacturers eventually increase production, supply improves and prices fall.

The current situation has an additional complication.

AI infrastructure represents a large and continuing source of semiconductor demand, and manufacturers have strong economic incentives to supply high-value AI-related products.

IDC therefore describes the current situation as more than a conventional short-term memory cycle and highlights the possibility of a longer-term reallocation of manufacturing capacity.

What The Current Data Tells Us

The figures come from different research methodologies, so they should not be interpreted as a single measure of overall electronics inflation. But together they show the direction of the market: memory costs are becoming a meaningful constraint for consumer-device manufacturers.

Frequently Asked Questions

Why are phones becoming expensive in 2026?

The biggest current factor is higher memory costs caused by tight DRAM and NAND supply, alongside strong demand for memory from AI infrastructure. Currency and other supply-chain costs can add further pressure, particularly in India.

Why are laptop prices increasing?

Laptops use DRAM and NAND-based SSD storage, so higher memory and storage component prices increase manufacturing costs. Other semiconductor, logistics and currency costs can also contribute.

Is AI responsible for higher smartphone prices?

Indirectly, yes. The main mechanism is not necessarily AI features inside smartphones. AI data centres require large quantities of high-performance memory, increasing demand for semiconductor capacity and contributing to tighter supply for conventional memory products.

What is the memory shortage?

It refers to a situation in which demand for DRAM and NAND is growing faster than available supply, creating higher component prices and tighter availability.

What is DRAM?

DRAM is a type of volatile memory used as working memory in smartphones, laptops, PCs, servers and other computing systems.

What is NAND?

NAND flash is non-volatile memory widely used for storage in smartphones, SSDs, memory cards and other devices.

What is HBM?

High-bandwidth memory, or HBM, is a high-performance memory technology designed to provide very high memory bandwidth and is widely used alongside AI accelerators and high-performance computing systems.

Why does AI increase demand for HBM?

Large AI workloads require extremely high memory bandwidth to move data efficiently between processors and memory. HBM is designed for this type of workload.

Will RAM prices keep increasing?

Future prices are uncertain. They depend on memory production, AI demand, inventory, semiconductor capacity and consumer demand. Current industry forecasts indicate that supply constraints could remain a concern through 2026 and beyond.

Why has India seen such a large smartphone price increase?

Counterpoint reported a 21% average increase in existing smartphone retail prices in India during 2026 so far. India's large price-sensitive market and exposure to imported components can make global component-cost increases particularly visible.

Are all smartphones becoming 21% more expensive?

No. The 21% figure is an average across the smartphones covered by Counterpoint's tracker. Individual models can have much smaller increases, larger increases or no change.

Are all laptops becoming 20% more expensive?

No. Laptop pricing varies significantly by brand, model, configuration, inventory and retailer. Memory shortages are creating cost pressure, but there is no single percentage applicable to every laptop.

Will smartphone companies reduce RAM to control prices?

Some manufacturers are adjusting specifications to manage higher memory costs. Counterpoint has reported changes including lower storage configurations and other specification adjustments.

Why are SSD prices affected?

SSDs use NAND flash. When NAND supply becomes tighter or more expensive, SSD component costs can rise.

Why are refurbished phones becoming more popular?

Higher new-device prices can make refurbished devices more attractive to consumers seeking lower-cost alternatives. Indian market reporting has shown growth in refurbished smartphone demand during 2026.

Should I buy a phone now or wait?

It depends on your need and budget. There is currently no reliable guarantee that prices will fall soon. If your existing device works well, waiting is reasonable; if you need a replacement, comparing current models, previous-generation devices and refurbished options can improve value.

Will AI eventually make phones cheaper?

AI could eventually reduce costs in some areas through better manufacturing, optimisation and competition, but that does not address the current memory-supply pressure. The short-term effect of AI infrastructure growth is increasing demand for certain semiconductor components.

When will laptop and smartphone prices become cheaper?

There is no confirmed date. Prices could ease if memory supply expands, AI-related demand stabilises, inventories improve or manufacturers compete more aggressively on price.

Is this another semiconductor shortage like 2021?

There are similarities in that both situations involve supply constraints and higher component prices. However, the current memory situation has a major additional driver: strong demand from AI infrastructure and the resulting allocation of manufacturing capacity toward AI-related memory products.

Conclusion

The rise in laptop and smartphone prices is not being caused by one simple factor.

But the most important current pressure is increasingly clear: memory has become more expensive and harder to source.

AI infrastructure is a major part of that story because modern AI systems require large amounts of high-performance memory. Memory manufacturers are therefore operating in a market where demand from data centres is competing with the needs of consumer electronics.

India is feeling the effect particularly strongly. Counterpoint's latest data puts India's average smartphone retail-price increase at 21% in 2026 so far, compared with 15% globally.

For consumers, this could mean higher prices, fewer aggressive discounts, slower specification improvements and longer device-replacement cycles.

For manufacturers, it means a difficult balancing act between component costs, specifications, margins and consumer affordability.

And for the technology industry, the episode demonstrates an increasingly important reality:

The AI boom is not only changing what computers do. It is also changing the economics of the hardware that consumers buy.