Global DRAM supply is likely to meet only 60% of demand through 2027; memory to hit ~40% of low-end smartphone manufacturing costs by mid-2026, up from 20% now
TOKYO/SEOUL — A shortage of memory chips appears likely to continue until around 2027, with the top U.S. and South Korean …
Context & Ripple Effects
This report reinforces a run of coverage in which memory producers were already described as operating near full capacity, with production slots constrained by AI-led demand. Samsung and SK Hynix had likewise signaled shortages through 2027, while SK Group’s chair warned that capacity additions may still lag demand for longer.
The new significance is the quantified pass-through to entry-level phones: a memory constraint that began as an upstream supply problem is becoming a bill-of-materials and volume problem for device makers.
First-order effects
- DRAM buyers face a prolonged allocation gap, with supply projected to cover only about 60% of demand through 2027.
- Low-end smartphone makers absorb a sharp increase in memory’s share of manufacturing cost—from roughly 20% to about 40% by mid-2026—pressuring margins, pricing, or device configurations.
Second-order effects
- The expected cost shock strengthens the shipment drag already forecast for 2026, particularly among Chinese smartphone OEMs that are more exposed to price-sensitive segments.
- Memory suppliers can continue to prioritize constrained output across higher-demand uses, while handset makers must compete more directly for available DRAM rather than treat it as a routine component input.
Third-order effects
- If capacity continues to trail demand, memory becomes a strategic bottleneck that shapes which electronics categories can scale, not merely a cyclical commodity cost.
- The pattern points to a more persistent split between AI-driven infrastructure demand and consumer-device affordability: capacity expansion may relieve pressure eventually, but the related coverage indicates that supply additions are not expected to quickly close the gap.
The trend: AI-led memory demand is turning a semiconductor capacity lag into memory-content inflation and a downstream affordability constraint for mass-market electronics.