Will AI chip demand affect smartphone prices in 2026?

Yes, analysts predict that the high demand for AI chips will redirect production, leading to increased prices for many smartphones in 2026.

Which smartphone brands will be most impacted by rising chip costs?

Lower-end smartphone manufacturers such as Xiaomi, Oppo, and TCL are predicted to be hit hardest and may pass costs to consumers.

Are Apple and Samsung phones affected by the AI chip shortage?

Apple and Samsung are expected to be better insulated due to their financial strength and long-term supply agreements, though RAM upgrades may be delayed.

Home / Technology / Budget Phones Face Price Hikes as AI Chips Dominate

Budget Phones Face Price Hikes as AI Chips Dominate

28 Dec, 2025

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Summary

AI chip demand redirects production, impacting smartphone components.
Budget smartphone prices may rise significantly in 2026.
High-end phone makers like Apple and Samsung are better insulated.

Budget Phones Face Price Hikes as AI Chips Dominate

Industry analysts predict that the escalating demand for AI chips will lead to higher smartphone prices in 2026. This surge in demand for AI data centers is diverting essential components, such as DRAM, away from consumer electronics production.

Consequently, budget-focused manufacturers like Xiaomi and Oppo are expected to pass on increased costs to consumers, potentially raising average selling prices by up to 8%. In contrast, premium brands like Apple and Samsung, with their substantial financial reserves and long-term supply contracts, are anticipated to weather this trend more effectively.

The impact is not limited to smartphones; the PC market is also projected to experience similar price increases. Console gaming may also be affected, with potential limitations on physical game releases due to rising production costs for next-generation hardware.