Why Smartphone RAM Now Costs More Than the Chipset

RAM Overtakes the Processor: What Changed Inside Your Phone

Smartphone RAM costs refer to the rapidly rising prices of memory components, which have now overtaken the processor as the most expensive part of many modern phones and are reshaping overall device pricing, especially for budget and mid-range models worldwide. Nothing CEO Carl Pei has confirmed that memory – RAM plus storage – can now account for more than half of a smartphone’s hardware bill. In a post on X, he stated that memory is “now the single most expensive component inside a modern handset – more than the processor, more than the display” in some devices. For the Nothing Phone (4a), internal memory costs doubled between the design decision and launch, then doubled again after release. This is a sharp break from the old component cost breakdown, where chipsets and displays usually dominated. As memory climbs to the top of the bill of materials, brands have less room to keep phone price increases away from consumers.

How AI Triggered a Memory Chip Shortage

The new economics of smartphone RAM costs are tied to a wider memory chip shortage driven by artificial intelligence infrastructure. Cloud providers building AI data centres are signing long, binding contracts with memory makers, locking in capacity that once served consumer electronics. When major memory suppliers say their order books are full, most of that supply is allocated to hyperscale AI customers, not phone brands trying to secure components for the next launch. According to The Eastern Herald, Nvidia’s Jensen Huang has made it clear that demand for AI hardware will exceed supply for years. Industry research cited by Gizmochina notes that DRAM prices have surged in 2026, adding around 10–30% or more to smartphone manufacturing costs depending on the model. This pressure is structural rather than temporary, which means memory-driven cost spikes are unlikely to fade quickly.

From Design to Checkout: Why New Phones Cost More

When RAM prices spike after a phone is designed, manufacturers face a choice: cut features, shrink memory, or raise prices. Nothing’s Phone (4a) shows how harsh this math has become. The company saw memory costs double between committing to the design and the device reaching warehouses, then double again post-launch, forcing price adjustments across the Phone (4a) and Phone (4a) Pro line-up. Gizmochina reports that since February, many new phones have launched about USD 100 (approx. RM460) higher than their predecessors, with fewer aggressive launch discounts. As RAM and storage swallow more of the component cost breakdown, brands have less budget left for cameras, displays, or marketing while preserving margins. That is why even modest phone price increases can appear alongside familiar spec sheets: the extra money is often covering invisible memory inflation rather than visible hardware upgrades.

Budget and Mid-Range Phones Take the Biggest Hit

Budget and mid-range models are most sensitive to rising smartphone RAM costs because every extra memory dollar eats into thin margins. Research cited by The Eastern Herald shows average smartphone prices in one major price-sensitive market climbed 7.9% in the first five months of 2026, while phones below roughly USD 120 (approx. RM552) jumped 17.6%. These are entry-level handsets where a small increase reshapes millions of buying decisions. Meanwhile, DRAM price hikes of 10–30% bite hardest in devices that must hit strict price points to stay attractive. Some premium models can absorb part of the increase or pass it on quietly, but mid-tier Android lines, regional brands, and challengers like Nothing are exposed. As memory chip shortages reward scale, larger players with stronger pricing power gain ground, while smaller manufacturers struggle to offer generous RAM configurations without noticeable phone price increases.

What Consumers Should Expect Next

All signs point to sustained pressure on smartphone RAM costs, which means the era of big discounts and flat pricing is under strain. Nothing’s Carl Pei has warned that memory prices could keep rising through next year and has advised buyers that waiting for future sales may mean paying more, not less. With AI data centres still absorbing vast memory supply and policy responses such as new semiconductor acts years away from changing output, relief is unlikely in the near term. For consumers, that translates into three practical expectations: fewer deep promotions, especially on high-RAM variants; more cautious RAM and storage options on cheaper phones; and continuing phone price increases even when chipsets seem unchanged. If you are sitting on an upgrade decision and see a fair offer today, the risk of higher prices later may now outweigh the hope of bigger discounts.