India may see costlier smartphones as RAM shortage worsens:World’s biggest memory chip maker says demand will stay high through 2028

The next smartphone you buy could cost more than expected. A growing shortage of memory chips is putting pressure on smartphone manufacturers, and the situation may not improve soon. Micron, one of the world’s biggest memory chip makers, expects demand for memory to remain higher than supply through 2027 and 2028. This could keep memory prices high and add to the cost of making smartphones. Phone makers are already dealing with higher component costs, with companies such as Apple, Nothing, Xiaomi and Samsung increasing prices on some products. Smartphone prices in India have also risen this year. Micron CEO and Chairman Sanjay Mehrotra said the company has already sold most of the memory it expects to make next year. He also warned that customers are likely to pay significantly more for memory. Sanjay Mehrotra explained: In calendar 2027 as well as 2028, we see demand exceeding supply. He added that supply could become even tighter in 2027 and 2028 compared with 2026. AI is taking up more memory chip capacity
One of the biggest reasons behind the shortage is the rapid growth of artificial intelligence. AI data centres need huge amounts of memory to process the large volumes of data used by AI models. A key component used in these systems is high-bandwidth memory (HBM). It works alongside powerful processors and allows AI systems to move large amounts of data quickly. Micron said demand for HBM is growing faster than demand for traditional DRAM, the type of memory widely used in smartphones, computers and other electronic devices. The problem is that HBM and regular DRAM rely on the same wafer manufacturing capacity. If chipmakers use more of that capacity to produce HBM for AI data centres, less capacity may be available for conventional memory. Samsung has also highlighted this pressure. According to Reuters, Samsung Executive Vice President Kim Taewoo said HBM could use nearly 30% of DRAM manufacturers’ total wafer capacity next year, compared with around 20% currently. Also read: Govt rejects reports of social media ban on under-18s: Why is the issue in focus, and should there be age restrictions?

Micron is spending billions to increase supply Micron is working to expand its manufacturing capacity, but the additional supply will take time to arrive. According to The Register, the company plans to spend $25 billion in the first half of its new financial year on expansion. Some of its new factories are expected to begin operations in 2028. However, Micron does not expect the new facilities to immediately solve the supply problem. The company has not given a clear timeline for when memory supply and demand will return to balance. For now, strong demand is also helping memory manufacturers earn more. Micron’s cloud memory business, which includes HBM, reported an 83% gross margin in the fourth quarter, up from 59% a year earlier. Its core data-centre business, which includes more DRAM sales, reported a 90% gross margin, compared with 41% a year earlier. Smartphone prices in India are already rising Higher component costs are already affecting India’s smartphone market. According to Counterpoint Research, the average smartphone price in India increased 16% in the first half of 2026. The average selling price reached $318 in the second quarter. Budget phones have also been affected. Smartphones priced below ₹10,000 became about 32% more expensive on average, while shipments in this segment fell 65% year-on-year in the first half of 2026. Huawei has also indicated that rising memory costs are affecting smartphone prices. Bloomberg reported that Huawei consumer business chief Richard Yu said the company’s smartphone costs had increased by an average of $200, although he did not specify the period used for comparison. Also read: NASA astronauts complete ‘dry dress rehearsal’ ahead of Crew-13 launch: What happens during this pre-launch test and why is it important before crewed spaceflight?

Will phones become more expensive? If memory remains in short supply over the next two years, smartphone makers could face another round of higher production costs. However, that does not necessarily mean the entire increase will be passed on to customers.
Phone companies may choose to absorb part of the additional cost, reduce other expenses, or change the specifications of some models. Still, if memory prices continue rising while AI companies consume more chip capacity, smartphone buyers could face higher prices, particularly in segments where manufacturers have less room to absorb rising costs.