Phone prices to surge in 2H26 as low-end models fade

The AI-driven surge in HBM and LPDDR5X demand is triggering a cost earthquake across consumer electronics. Technically, tighter integration between SoCs and memory subsystems raises design barriers, forcing smaller OEMs to abandon low-margin entry-level models—accelerating market consolidation among smartphone giants. On the compliance front, U.S. export controls on advanced packaging tools have indirectly inflated procurement costs for foundries in Taiwan, China and mainland China, while stricter Japanese and Korean material export reviews erode supply chain resilience. Samsung and Apple will likely secure HBM capacity via long-term deals to build moats, leaving Xiaomi and OPPO—reliant on spot markets—exposed to volatile pricing. Over the next 18 months, 'chipflation' won’t ease with new capacity; instead, competition from AI PCs and on-device large models will intensify memory scarcity, potentially erasing budget smartphones from mainstream channels and widening the global digital divide.