AI-fueled chip scarcity is driving up smartphone costs | EUROtoday

The advantages of synthetic intelligence (AI) might come at a excessive value for shoppers. Surging demand for reminiscence chips is driving up the value of smartphones and computer systems — together with in Germany.

“The AI boom, along with the massive investments in infrastructure and data centers that come with it, is having a noticeable impact on the memory chip market,” Wolfgang Weber, CEO of the German Electro and Digital Industry Association (ZVEI), advised DW.

“According to analyses by the World Semiconductor Trade Statistics (WSTS) institute, costs for these chips rose by 50% final yr,” Weber stated. As a consequence, shoppers might face not solely longer supply occasions but additionally greater costs for digital and digital units.

“Bottlenecks in such key technologies pose a serious problem for our economy,” the affiliation’s head warned. “The chip shortage alone between 2021 and 2023 caused more than €102 billion ($121 billion) in economic damage in Germany.”

Boom within the semiconductor market

The newest figures from WSTS underscore the trade’s speedy development (see chart). In the primary half of 2025, the worldwide semiconductor market reached  $346 billion (€293 billion) — a rise of 18.9% in contrast with the earlier yr.

Overall, WSTS forecasts 22% development for 2025, bringing the market to $772 billion. For 2026, it expects a fair sharper rise of greater than 25%, pushing the market to $975 billion.

How a lot smartphone costs may enhance has been examined in a research by the market analysis agency IDC (International Data Corporation).

“In a moderate scenario, average smartphone selling prices could rise by 3 to 5%,” the research states. “In a pessimistic scenario, they could increase by as much as 8%.”

Experts warn of a turning level. The age of low cost, plentiful reminiscence and storage is ending. In 2026, know-how is about to change into costlier — not as a result of demand is booming, however as a result of provide cannot sustain.

Samsung: Smartphones will change into costlier

In late January, Samsung Electronics President Wonjin Lee introduced potential value will increase in an interview with Bloomberg. “Prices are going up,” Lee stated. “Obviously, we do not want to convey that burden to the consumers. But we’re going to be at a point where we have to actually consider repricing our products.”

Apple, in the meantime, has not publicly commented on doable value will increase. However, analysts at funding financial institution Morgan Stanley predict of their 2026 outlook that the corporate will seemingly hold costs for its base mannequin secure at a excessive degree, whereas probably charging extra for units with bigger storage capacities.

More reminiscence, greater prices for smartphones

The use — and price — of reminiscence chips in smartphone manufacturing has risen sharply over the previous 5 years. According to trade knowledge, reminiscence accounted for round 8% of whole part prices in a tool such because the iPhone 12 Pro Max in 2020.

By September 2025, that share had climbed to roughly 10% within the iPhone 17 Pro Max. Due to the continued rise in reminiscence chip costs, analysts at analysis agency Counterpoint Research estimate that this share may even enhance to as a lot as 20%.

German market stagnates

In gentle of the present chip shortages, Germany’s digital trade affiliation Bitkom expects a interval of stagnation — or perhaps a slight decline — within the home market.

“Consumer demand in Germany is generally rather weak at the moment,” Sebastian Klöß, Head of Markets and Technologies at Germany’s digital affiliation, Bitkom, advised DW.

Still, trade revenues proceed to publish regular — albeit modest — development. However, that is largely as a result of constantly rising gadget costs. According to a Bitkom research, the typical value of a brand new smartphone in Germany elevated from €591 ($704) in 2024 to €605 ($720) final yr.

Refurbished smartphones are the winners

In distinction to sluggish demand for brand new units, the marketplace for used smartphones is experiencing sturdy development.

According to a joint evaluation by market analysis agency NIQthe Society for Consumer Electronics (GFU), and IFA Management, refurbished smartphones reached a 9% market share within the EU in July. In January 2025, the determine had been simply 5%.

“In some markets, refurbished models now account for more than 40% of online sales in the sub-€600 segment,” the evaluation states. “Refurbished devices are evolving from a niche product into an established force in the market.”

This piece was initially printed in German.