Please consider How the memory crisis is reshaping the PC and smartphone outlook
In December 2025, we published our analysis of the global memory shortage crisis and its potential impact on the PC and smartphone markets heading into 2026. At that time, we outlined two negative-impact scenarios, ranging from low single-digit to high single-digit market declines. This week, IDC released updated forecasts for both the worldwide PC and mobile phone markets, and the outlook has become significantly worse. The current situation is now more negative than even our most pessimistic scenarios suggested just a few months ago.
Markets and Trends February 26, 2026 7 min
Higher ASPs, lower unit volumes: How the memory crisis is reshaping the PC and smartphone outlook
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Two technology professionals reviewing data on a tablet in a research facility, representing market analysis amid semiconductor and memory supply constraints.
In December 2025, we published our analysis of the global memory shortage crisis and its potential impact on the PC and smartphone markets heading into 2026. At that time, we outlined two negative-impact scenarios, ranging from low single-digit to high single-digit market declines. This week, IDC released updated forecasts for both the worldwide PC and mobile phone markets, and the outlook has become significantly worse. The current situation is now more negative than even our most pessimistic scenarios suggested just a few months ago.
The Market Pull-Forward
As concerns about DRAM and NAND pricing escalated in late 2025, vendors across both the PC and smartphone categories moved aggressively to get ahead of the problem. Shipments ramped significantly in the fourth quarter of 2025, as noted in our recent press releases on Q4 2025 PC historical shipment data and mobile phone historical shipment data. These elevated levels have continued into the first quarter of 2026 for the PC market, as OEMs rush to ship products before memory and storage price increases take full effect. The result is that we now expect Q1 2026, which ends in March, to come in significantly higher than our November forecasts for PCs. For smartphones, the situation is exasperated, with Q1 2026 forecast to decline 6.8%As memory prices climb and some vendors, particularly smaller ones, struggle to secure and/or pay for adequate supply, we expect unit volumes to fall off dramatically beginning in the second quarter.
Average selling prices (ASPs) will rise, but volume demand will weaken in response. The net effect will be negative year-over-year unit growth for the full year, even as the revenue picture looks deceptively stable due to inflated ASPs.
For PCs, we are now forecasting the worldwide market to decline by 11.3% in 2026, while revenues grow 1.6% due to increased ASPs. Our current forecast shows the market flattening in 2027, with a rebound now pushed out to 2028. The smartphone market looks even more dire, as we’re currently forecasting the worldwide market to decline by 12.9% in 2026, with revenues declining slightly by 0.5%. We expect 2027 to see a modest 1.9% growth for smartphones, with a stronger 5.2% rebound in 2028.
IDC expects the memory supply challenges to persist throughout 2026 and likely well into 2027. While we do anticipate that the rate of memory price acceleration will slow in the second half of this year, prices will continue to rise and remain elevated. Based on current assumptions, our model does not point to a reversion to 2025 pricing levels within the forecast horizon. The structural dynamics driving the shortage, surging AI infrastructure demand competing with consumer device needs for the same DRAM and NAND capacity, remain firmly in place. There may be some relief as memory capacity buildouts increase and smaller memory suppliers in China come into play. However, we do not expect it to offset the shortage in a meaningful way and change the trajectory of the crisis.
The downstream consequences of the crisis are becoming clearer and will reshape competitive dynamics in the PC and smartphone markets described here, as well as in other device markets such as tablets, XR headsets, wearables, and gaming consoles.
Share shifts favoring larger vendors
Companies with greater purchasing power, stronger supplier relationships, and the ability to commit to large-volume contracts will be better positioned to secure memory allocations at high, but more manageable prices. Smaller and regional vendors, already operating on thinner margins, will find it increasingly difficult to compete for supply. We expect meaningful market share shifts in favor of the largest global OEMs over the course of 2026.
We also expect vendors to begin shipping some new devices with less memory than consumers have grown accustomed to. Rather than absorbing the full cost of higher-priced memory, some OEMs will opt to reduce average DRAM and NAND configurations in their products. A phone that might have shipped with 12GB of RAM and 256GB of storage a year ago may now debut with 8GB of RAM and 128GB of storage at the same price point, or worse. The same dynamic will play out in PCs, where base configurations could see meaningful reductions in RAM and SSD capacity.
Tariff uncertainty adds another layer of risk
The policy environment is adding its own volatility. Last week, the U.S. Supreme Court struck down the broad reciprocal tariff regime imposed by the Trump administration, ruling that the executive authority exercised exceeded its statutory scope. The administration has since moved to levy a 10% across-the-board tariff on imports using alternative legal authority, and is working to raise it to 15.
For the device industry, this creates deep uncertainty. A 15% tariff on finished goods and components layers additional cost pressure on top of already-inflated memory prices. Vendors cannot plan pricing, sourcing, or inventory strategies with any confidence. Some costs will be passed through to consumers, compounding affordability challenges.
That’s an IF, not a prediction. But either way, the result won’t be good. And stagflation accompanied by job losses still remains a distinct possibility.
Much depends on how fast the labor markets deteriorate.
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Finally, please consider BLS Private Payrolls for 2025 Q2 Overstated by ~847,000
The Business Employment Dynamics report shows -321,000 vs Payroll report +526,000. Believe BED.
For now, the bond market is reacting as if job losses will hit demand without stagflation.
