The global market for PCs and smartphones is facing a tough time this year. Analysts warn that sales could fall by more than 10%, mainly because a shortage of memory chips is driving up prices and squeezing supply. This shift is largely due to big investments in AI data centers by large tech companies, which are demanding more memory than ever before.

PC Market Slumps as Memory Costs Rise

PC shipments are expected to drop by around 10.4% in 2026 compared to last year. The main reason for this decline is the limited supply of memory chips, which has caused prices to soar. According to Gartner, memory now makes up about 23% of the total cost to build a PC, up from 16% in 2025. This increase is pushing up the average price of new computers by approximately 17%.

Large PC manufacturers like HP are feeling the impact more than smaller vendors. HP revealed that memory now accounts for 35% of their PC production costs, a significant jump from previous quarters. Smaller companies with tighter margins are especially vulnerable, and some experts suggest this could lead to industry consolidation—where only the strongest survive.

Smartphone Sales Are Also Declining

The smartphone market isn’t immune either. Forecasts show shipment numbers could fall by 8.4% according to Gartner or even 12.9% based on IDC predictions. The shortage of memory chips is a major factor here too, making it more expensive to produce new phones. This means manufacturers might hold off on launching new models or raise prices to cover costs.

With higher prices, consumers may delay upgrading their devices, which could slow down the overall sales cycle. IDC noted that the speed at which memory prices are rising has surprised many in the industry. Prices are expected to jump by around 130% in 2026, creating a challenging environment for both vendors and buyers.

Market Outlook and Business Impacts

The rising costs are leading to longer PC refresh cycles, meaning companies and individuals might keep their current devices for more years. Gartner predicts this could extend refresh times by about 15% in 2026. Businesses are now negotiating more cautiously, trying to lock in prices before they rise further, but many are finding it hard to get stable prices for long.

For enterprise users, this situation could cause delays in adopting new technology or upgrading existing systems. Some companies that recently moved to Windows 11 might face hardware limitations, as new features could demand more memory, which their current devices might lack. Despite these challenges, investment in AI-capable PCs continues, although at a slower pace and with devices that have less memory.

The overall outlook suggests these issues will persist for the foreseeable future. Industry experts warn that high memory prices will likely stay through at least 2027, driven by structural shifts in supply and demand. For consumers and businesses alike, experts recommend either buying now before prices climb further or waiting until the market stabilizes.

Inspired by

• https://www.computerworld.com/article/4138726/memory-shortage-batters-pc-market-double-digit-sales-drop-coming-say-analysts.html

Sources

• gartner.com
• idc.com
• idc.com