One of the key issues is legacy LPDDR4 supply tightness brought on by suppliers shifting output to more advanced chips to service AI demand, which is distorting markets. Spot price imbalances are occurring, with DDR5 for servers and PCs trading at around $1.50 per gigabit, while older DDR4 used in consumer electronics fetches $2.10 – higher than that of even advanced HBM3e, which is hovering around $1.70.

Counterpoint forecasts DRAM production increases exceeding 20% in 2026 across all key chipmakers. Research Director MS Hwang said, “Samsung may reallocate its expanding 1C process, SK hynix is pushing production and raising sales targets, CXMT may surprise on the upside and Micron, typically disciplined on ROI, is unlikely to hold back.”

Longer, broader-term risk: Advanced memory

The current chip shortage is mostly about legacy tightness, which is affecting low-priced consumer electronics products like budget smartphones using LPDDR4.

“The bigger risk on the horizon is with advanced memory as NVIDIA’s recent pivot to LPDDR means it is a customer on the scale of a major smartphone maker — a seismic shift for the supply chain which can’t easily absorb this scale of demand,” said Hwang.

Traditionally, servers have relied on DDR memory with error correcting code (ECC) for reliability, but NVIDIA is pivoting to LPDDR for lower power consumption and handling error correction at the CPU level rather than relying on DDR5 ECC.

Accordingly, Counterpoint forecasts a 2x increase in DRAM module prices for DDR5 64GB RDIMM across Q1 2025 to the end of 2026 in a highly constrained scenario.

DRAM Price Scenario (DDR5 64GB RDIMM)

Source: Counterpoint Research ‘Memory Solutions for GenAI’ Bi-Weekly, Issue 21

The current shortage is being felt mainly in the lower end of the smartphone market, hitting budget smartphone makers. “But the pain could spread across the broader smartphone and consumer electronics ecosystem,” said Senior Analyst Ivan Lam. “We are talking here about big increases to smartphone BoMs – upwards of 15% in the case of some models – across the key mid-to-high-end segments, eating into margins or affecting growth. It will probably be both.”

All this will be framed by macro risks – from tariffs and geopolitics to employment trends – which add another layer of uncertainty. The industry now faces a volatile mix of constrained capacity and surging prices, which will force painful trade-offs for suppliers and manufacturers alike.

*A previous version of this release misstated the projected smartphone BoM increase as 25%; the correct figure is 15%.

About Counterpoint Research

Counterpoint Research is a global market research firm specializing in products across the technology ecosystem. We advise a diverse range of clients – from smartphone OEMs to chipmakers and channel players to Big Tech – through our offices located in the world's major innovation hubs, manufacturing clusters and commercial centers. Our analyst team, led by seasoned experts, engages with stakeholders across the enterprise – from the C-suite to professionals in strategy, analyst relations (AR), market intelligence (MI), business intelligence (BI), product and marketing – to deliver services spanning market data, industry thought leadership and consulting. Our core areas of coverage include AI, Automotive, Consumer Electronics, Displays, eSIM, IoT, Location Platforms, Macroeconomics, Manufacturing, Networks and Infrastructure, Semiconductors, Smartphones and Wearables. Visit our Insights page to explore our publicly available market data, insights and thought leadership, and to understand our focus, meet our analysts and start a conversation.

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