The global smartphone market is heading for its worst year in over a decade. Shipments are forecast to fall 13.9% year-over-year in 2026, landing somewhere between 1.08 and 1.09 billion units, according to Counterpoint Research.
That would make it the largest annual contraction the smartphone industry has ever recorded. To put the volume in perspective, you’d have to rewind to 2013 to find shipment numbers this low.
The AI-shaped hole in your phone’s supply chain
This isn’t your standard cyclical downturn. The culprit is a severe shortage of memory chips, specifically DRAM and NAND, the components that let your phone store photos and run apps without crawling.
The shortage exists because manufacturers have been reallocating production capacity toward high-bandwidth memory (HBM) chips. The same factories that used to make memory for smartphones are now making memory for AI servers, because that’s where the money is. Nvidia’s appetite for HBM chips has effectively cannibalized supply for consumer devices.
