Smartphone Shipments to Fall 12.9% in 2026 on Chip Shortage

The global smartphone market is bracing for its steepest decline in over a decade, with shipments projected to fall 12.9 percent in 2026 to about 1.12 billion units, according to a forecast from research firm International Data Corporation. The downturn, driven by an ongoing shortage of memory chips exacerbated by surging demand for artificial intelligence applications, marks a significant contraction from the 1.26 billion units shipped in 2025.

The crisis stems from supply constraints in DRAM and NAND chips, essential for processing and storage in mobile devices. These shortages, which have rippled across the electronics industry, are expected to persist into 2027, forcing manufacturers to grapple with higher component costs. IDC analysts attribute the issue to AI-related demand draining global supplies, leaving smartphone producers with limited options. "What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain," said Francisco Jeronimo, IDC's vice president for worldwide client devices.

Average selling prices for smartphones are anticipated to rise 14 percent this year, reaching a record $523, as companies shift toward...