Memory Crisis to Reshape PC and Smartphone Markets

Gartner has issued a significant warning for 2026, projecting that a global memory supply crunch will cause the sharpest contraction in device shipments in over a decade. Driven by a massive 130% surge in combined DRAM and SSD prices, the market is entering a "structural reset" where affordability is sacrificed for margin protection.

The soaring cost of components is expected to drive a double-digit decline in volumes as vendors pass expenses directly to consumers and enterprise buyers.

Perhaps the most striking prediction is the total obsolescence of the budget segment. As memory costs peak at 23% of the total Bill of Materials (BOM) for PCs, manufacturers can no longer absorb the costs for low-margin products.

• The "Sub-$500" Death Knell: Gartner predicts the sub-$500 entry-level PC segment will completely disappear by 2028.

• Smartphone Displacement: Basic smartphone buyers are expected to exit the market at five times the rate of premium buyers, shifting instead toward refurbished models or simply "sweating" their existing assets for longer.

The "AI PC" revolution is also facing a significant setback. While these devices were expected to dominate by 2026, their high memory requirements (often 16GB to 32GB minimum) make them prohibitively expensive during this shortage.

• Delayed Penetration: Gartner has pushed back the 50% market penetration milestone for AI PCs to 2028.

• Enterprise Hesitation: Business buyers are likely to extend the life of existing fleets to manage budgets, raising concerns about security vulnerabilities as older hardware remains in service past its ideal retirement date.

Moving forward, Gartner highlight the first half of 2026 as a critical window. Vendors are urged to optimize pricing and secure supply contracts immediately, as component inflation is expected to compress profitability aggressively starting in the second quarter. The industry is being advised to prioritize profitability over unit volume, accepting a decline in sales to sustain financial health.