Smartphone Market To Shrink 15% This Year Due To Memory Crisis (theregister.com) 55
CCS Insight expects global smartphone shipments to fall 15% this year as AI-driven demand pushes memory manufacturers toward higher-margin server chips. "[S]ome entry-level devices have already seen their sticker prices go up by more than 50 percent since last year," reports The Register. From the report: The firm found that the primary smartphone market (meaning new devices) contracted 4.4 percent in the first quarter of this year, despite sales channels front-loading (meaning stockpiling) product inventory, as device prices begin to rise sharply. As CCS notes, this casts an ominous shadow on the outlook for the rest of the year, and it seems things have worsened since The Register first started reporting on the smartphone memory woes.
Back in January, the forecast was for handset price rises of 6-8 percent, while the most pessimistic outlook was that the global market might contract as much as 5.2 percent. By February, analysts were expecting to see a decline in shipments of around 8 percent across the global market, and for prices to increase by about 14 percent.
The root cause of all this is the AI craze, which has seen huge demand for high-performance GPU-filled servers to process it all. Chipmakers have moved to capitalize on this by prioritizing production of high-margin memory components for those servers, rather than making the plain old DRAM and NAND needed for PCs and phones. "The memory chip crisis shows no sign of slowing down in the near future, ramping up the pressure on manufacturers and consumers. Memory components now account for more than 30 percent of a manufacturer's bill of materials in some smartphones." said CCS research analyst Ben Hatton. "The full impact has yet to be felt in many regions, but it's clear that device prices will accelerate over the rest of the year."
Back in January, the forecast was for handset price rises of 6-8 percent, while the most pessimistic outlook was that the global market might contract as much as 5.2 percent. By February, analysts were expecting to see a decline in shipments of around 8 percent across the global market, and for prices to increase by about 14 percent.
The root cause of all this is the AI craze, which has seen huge demand for high-performance GPU-filled servers to process it all. Chipmakers have moved to capitalize on this by prioritizing production of high-margin memory components for those servers, rather than making the plain old DRAM and NAND needed for PCs and phones. "The memory chip crisis shows no sign of slowing down in the near future, ramping up the pressure on manufacturers and consumers. Memory components now account for more than 30 percent of a manufacturer's bill of materials in some smartphones." said CCS research analyst Ben Hatton. "The full impact has yet to be felt in many regions, but it's clear that device prices will accelerate over the rest of the year."
I just had to replace a phone for a family member (Score:3)
Under normal circumstances there's at least a dozen companies that would be manufacturing ram right now but with antitrust law enforcement Up in smoke nobody is going to take the risk because if they try one of the big ram producers will just temporarily lower their prices and run them out of business.
Elections have consequences and one of them is you don't get cool electronics anymore.
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And I bought more or less the same phone I bought last year but it was $200 more. So yeah. Nobody is going to be looking to upgrade they're going to hang on to what they've got unless it breaks.
There is a group of people who believe their self worth is based upon owning the newest greatest shiny thing every year. Sales to that group are mostly price insensitive, and they will pay whatever it costs.
There's also people that want tech to use it (Score:2)
Also there's a good reason to spend extra money sometimes. I think I've mentioned it before but the newer Qualcomm phones have vastly Superior 5G modems compared to the Samsung ones or heaven help you those cheap Mediatek ones. If you're in an area with good signal you won't notice it but if you're in a dead zone like I am having a more expensive phone with the fancy Qualcomm chipset is the difference between me getting text messages and phone calls and not.
It's not always about keeping
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"There is a group of people who believe their self worth is based upon owning the newest greatest shiny thing every year".
And just how large is this group? Have you or anyone else any statistics on them? Is it large enough that they can swing a market or decimal dust that we can ignore.
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"There is a group of people who believe their self worth is based upon owning the newest greatest shiny thing every year".
And just how large is this group? Have you or anyone else any statistics on them? Is it large enough that they can swing a market or decimal dust that we can ignore.
Have you heard of this company called Apple?
Start your research there. Good luck !
Re: I just had to replace a phone for a family mem (Score:2)
"Less teenagers, less high-consumption people" (Score:2)
Aging demographics.
Millennials hit their beyond-giving-birth years.
Aged 32 to 47 now with rapidly declining chances of ever giving birth to the first baby.
Age 27 women have a less than 50% chance of ever giving birth if the have not done so by age 27. Includes married, single, in a relationship, engaged, etc.
Re:I just had to replace a phone for a family memb (Score:5, Insightful)
Elections have consequences and one of them is you don't get cool electronics anymore.
I know for you politics is like the square hole that everything fits into [youtu.be], but the RAM shortage is just capitalism being capitalism (and you probably know the famous saying that it's the worst system except for everything else we've tried). It's been explained to death - the RAM manufacturers are worried that if they build more capacity, the AI bubble could pop and then they'd be left holding the bag.
I'm not even sure how you'd fix this situation. Some types of businesses are just extremely expensive to start, which is also why there aren't like 50 different competitors to Disney World.
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And no the bubble isn't going to pop. Ram manufacturers have orders locked in for the next 3 years. And RAM prices have been elevated for almost 2 years now. There was already a supply chain strain from those blo
Re:I just had to replace a phone for a family memb (Score:4, Insightful)
Left-Wing candidates have been in charge off and on about half the time since
I've even been alive and they have yet to do anything other than the typical
politician business-as-usual routine.
They've had ample opportunities to " fix " things and have done exactly squat
with it.
PS - Don't be so quick to throw that " old fart " tag around. Given your Slashdot
ID, you're already sailing on the edges of those waters as it is.
Re: (Score:2)
We haven't seen a president in the US who could be considered anything less than 'conservative' since Carter in 1980, everyone since then is either conservative, hyper-conservative, or wing-nut loony conservative. In civilized areas of the world the Democratic Party would be considered moderate-right.
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And no the bubble isn't going to pop. Ram manufacturers have orders locked in for the next 3 years.
Heck, the story is still on the main page: OpenAI Losses Increased Nearly 8X In 2025, With Spending Hitting $34 Billion [slashdot.org] AI isn't likely to go away, but the current level of spending isn't sustainable. Guess what's going to happen when the purse strings start getting tightened? Yep, those RAM orders might start going *poof*. Irrational exuberance is a well-known phenomenon, and anybody who paid attention during the dot-com boom knows exactly where this is heading.
The other big hole in your theory that th
Still smells bubbly (Score:2)
> And no the bubble isn't going to pop.
It's smells more bubblier over time. Sales of AI services are not self-supporting the hardware and infrastructure needed. AI usage numbers are based on the heavily discounted services supported by investors and market-share fights. These subsidies cannot last forever. Users will be more judicious with AI use when they have to pay real prices, and the market will realize it over-built.
Investors are pricing in big breakthroughs, and if these don't arrive, the existing
Re: (Score:2)
Elections have consequences and one of them is you don't get cool electronics anymore.
I know for you politics is like the square hole that everything fits into [youtu.be], but the RAM shortage is just capitalism being capitalism (and you probably know the famous saying that it's the worst system except for everything else we've tried). It's been explained to death - the RAM manufacturers are worried that if they build more capacity, the AI bubble could pop and then they'd be left holding the bag.
I'm not even sure how you'd fix this situation..
Perhaps we stop bullshitting first and call it what it is; an AI crisis. Not a memory crisis.
Address the fucking root cause already. Otherwise the next critical need AI needs will be the next “crisis” in need of a politician demanding your tax dollars. Wrong. No. Fuck that shit.
Re: (Score:3)
"Democracy is the worst form of Government except for all those other forms that have been tried". The saying doesn't refer to capitalism.
And the reason democracy isn't very good, but is still a lot better than an absence of democracy, is capitalism. Well, sort of. A more complete picture is that we need a lot of democracy, but what we have in countries which have elections is only a little bit of democracy. It's still a lot better than having no democracy, but it's not remotely enough. We only have a littl
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The usual way of fixing it is to designate those products as critically important and put in a mandate for making them available. Take water, for example. Data centres need it, humans need it, farms need it. If it was just sold to the highest bidder we would be in trouble.
I'm hoping that Chinese manufacturers step up to increase supply, because they will be less concerned about demand drying up. They have both a rapidly expanding domestic market, and the longer term goal to out-compete rivals on price. CXMT
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It takes 3-5 years to build and start a RAM fab.
There are quite a few being built around the world. First ones are expected to be started in about two years.
Your post is nonsense.
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Or you could buy a very capable Moto G Power for $250, unlocked. https://www.amazon.com/Motorol... [amazon.com]
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Under normal circumstances there's at least a dozen companies that would be manufacturing ram right now but with antitrust law enforcement Up in smoke nobody is going to take the risk because if they try one of the big ram producers will just temporarily lower their prices and run them out of business.
Couldn't potential RAM manufacturers lock in long-term contracts, sort of like oil futures? That would be a win-win for phone companies and RAM makers. Even if the big RAM makers try to bust the future market with price dumps, the phone companies would still win due to market predictability, which is a huge thing.
Re: I just had to replace a phone for a family mem (Score:2)
can confirm (Score:1)
I was going to buy a new phone last month but then I didn't because of the prices. Moto normally deeply discounts the old model but didn't even do that, their old models stayed fairly expensive, and the new models are very expensive (compared to normal, they still aren't as cracked out as Samsung.)
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I was going to buy a new phone last month but then I didn't
Same, I forgot to.
"Crisis" (Score:3)
AI shit the bed and we're calling it a "crisis", despite critics for years warning that AI was going to screw up the supply chain.
Re: "Crisis" (Score:2)
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I remember the Dot Com crash ripping my Dad's retirement account to bits. This is going to be a repeat of that for most of the middle class that let some investment account manager play with their life savings.
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AI shit the bed and we're calling it a "crisis", despite critics for years warning that AI was going to screw up the supply chain.
The AI bubble, couldn’t be more fucking obvious when the RAM manufacturing barrier to entry is “we can’t risk it, because bubbles..”
Downstream inflation like used cars 5 years ago (Score:2)
It's also cascading down to the used phone market. I haven't bought a brand new top-line phone in 18 years because I'm not a heavy user. I buy used/refurbed models from 3-4 years ago and use them for 3-5 years. Typically I could get them for $150-$275 by timing a purchase with new-model release cycles, when early-adopters flood the market with castoffs, so the level 2 adopters upgrade to a used level 1, etc. This past Christmas season I considered upgrading, but there was noticeable across-the-board inflati
It’s a bubble (Score:4, Insightful)
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The RAM suppliers aren't good at predicting demand. In 2023 there was an oversupply that tanked their margins. Today there's a "supply crisis". Ramping up now would guarantee another oversupply in 3 more years. It's as simple as that.
Re: (Score:3, Interesting)
They're ramping up regardless through. Quite a few new fabs are being built and capacity of existing ones is being expanded. Also we're seeing new entrants into the market, like Chinese CXMT that have brought their DDR5 tech to the market. Finally Taiwanese are taking another shot at the DDR market as Nanya is finishing build-out of their Fab 5A which is intended for 10nm grade processes, which means that DDR4 and LPDDR4 supply will soon grow significantly as that fab starts.
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Then don't buy a no-name Chinese brand memory. Buy whatever is packaged by a brand name packaging company that offers them.
Most of the time, you won't even know what RAM is actually inside it unless you specifically try to find out, because a lot of modern RAM has heat spreaders covering actual chips entirely.
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The consumer market doesn't make them any money. Like...when asked about the consumer markets....not a single company cared. We're too small a market. WD basically said consumers were less than 5% of their income and they dropped us like a bad habit. Memory makers stopped making to the consumer marekt.
Think about that....consumers...are not the primary market. We don't matter anymore.
This is not about a bubble...it's about taking a market away from us. This will never end. They don't want us to have persona
Re: It’s a bubble (Score:2)
And people are keeping them longer? (Score:4, Informative)
Excuses (Score:2)
While some may point to $random_crisis_of_the_day as the reason folks aren't replacing their
phones, the reality is probably far easier to explain.
Phones are just stupid expensive all the way around. Especially if you are one of those folks
who have to have the bleeding edge in tech to flash around as nerd cred.
Personally, I don't need eleventy four bazillion giga-pixels across half a dozen camera lenses.
( I have a real camera and enough lenses to outfit a club for that thank you very much )
I neither want nor
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I do use a Samsung phone with the ability to write dimensions on photos of equipment, but other than that, mostly use it to phone. I am still on the 2022 model, which was bought for me as a present.
What I really want, and would pay a fair price for today, is a properly supported Linux phone. (Hierarchical Drop-down menus, no icons). With the option to run Open
Surely it's AI (Score:3)
upgrades were more meaningful (Score:3)
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64 camera lenses oughtta be enough for anyone!
- Phone J. Gates
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Don't worry - Commodore to the rescue (Score:2)
Shrinking by or to 15%? (Score:1)
I know the answer, but it's still surprising that 85% of the people are still willing to pay AI tax.
Or putting forward an alternative view.... (Score:2)
I'm Out of the Market for Now.. But That's Not Why (Score:2)
I have an iPhone 13. It's fine. In fact, a couple of months ago I paid Apple to replace the battery in it with an OEM replacement. It was actually a pretty reasonable cost. I should be good for another few years. I'll hang on to this one until I damage it beyond repair, or they retire LTE. Because in all other ways, it's as much phone as I could possibly want.