Those smartphone price hikes we've feared look like they're about to start

Data centers powering AI software have been gobbling up memory supplies in recent months, driving up the cost of both flash storage and RAM. This memory crunch is leading to higher manufacturing costs for consumer goods like smartphones, and new reporting suggests that big players like Samsung and Apple will raise prices on their 2026 releases to keep up.

Korean-language outlet Aju News reports that the upcoming Xiaomi 17 Ultra will be the first major smartphone release to come with a price hike caused by the current memory shortage; the phone is expected to cost 10% more than Xiaomi 15 Ultra that was released in March. The report goes on to say that the next generation of smartphones generally, including the Galaxy S26 and iPhone 18, will also see higher launch prices.

According to Aju News, Samsung’s sales targets for the S26 series, Galaxy Z Flip 8, and Galaxy Z Fold 8 are all 10% higher than the targets the Korean manufacturer set for its flagship releases this year. A report from market research firm Counterpoint estimates that the average selling price of smartphones in general will increase by 6.9% in 2026, in part due to “cost pass-through.”

Memory prices are expected to continue to rise in the first half of 2026. Counterpoint says that the budget phone market may be hit the hardest, estimating that bill of materials costs for phones like those currently selling under $200 could rise by as much as 30%. More expensive phones will see proportionally smaller manufacturing cost increases.

AI data centers require a lot of memory components to power tools like Gemini and ChatGPT, and construction of new data centers continues at a brisk pace. Exacerbating the price effects of newly increased demand, AI providers are seemingly able and willing to outbid consumer electronics manufacturers to secure their share of the limited RAM and storage being manufactured, driving prices higher still.

Phone prices have generally held steady for the past few years — the Galaxy S21, S22, S23, S24, and S25 series, for example, all started at $799.99 ($200 less than the launch price of 2020’s Galaxy S20). Rising costs for consumers were inevitable, though given the large-scale societal investment in AI hasn’t increased the average worker’s take-home pay, the coming price hikes will be especially hard to stomach for many buyers.