Chip shipments are dropping, but your next phone will be smarter and pricier as the industry doubles down on premium AI and 2nm tech.
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Global smartphone chipset shipments are expected to fall 7% in 2026, but industry revenue is still set to grow in double digits.
AI-driven data center demand is pushing chipmakers toward high-margin HBM, driving up DRAM prices and squeezing phone makers.
Budget phones under $150 are taking the biggest hit as rising costs make low-end devices harder to sustain.
The smartphone industry is facing a paradox. Counterpoint Research reports that global smartphone chipset shipments will drop by 7% in 2026. Normally, fewer shipments would mean trouble for the industry, but this time, manufacturers are still expected to see double-digit revenue growth.
So, why are shipments dropping? Part of the reason is the growing demand from data centers. As AI becomes more common, chipmakers are shifting their resources to produce high-margin HBM (High Bandwidth Memory) for large server farms. This shift has caused DRAM prices to rise sharply, making it harder for manufacturers to create affordable phones without taking a loss.
