Memory is the new king of cost: Carl Pei explains why mobile phones are rising in price

The mobile phone market is facing a silent but devastating paradigm shift for the user's pocket. Carl Pei, the media CEO and founder of the technology firm Nothing, has raised his voice to warn about a structural crisis: memory chips (DRAM and NAND Flash) already cost more than the processor and the screen combined.

This increase in manufacturing costs is forcing manufacturers to readjust retail prices and marks the definitive end of the era of powerful smartphones at a low price.

It's the fault of Artificial Intelligence and the cloud

For the first time in more than a decade, consumer electronics manufacturers are not competing solely with each other for the supply of silicon. In 2026, smartphone giants such as Samsung, Nothing or Xiaomi share memory suppliers with the colossal AI data centers operated by Microsoft, Amazon, Google and Meta.

Exploring and training large language models (LLMs) require huge amounts of high-speed memory (HBM and server-optimized DRAM). Large cloud corporations, with nearly unlimited budgets, are reserving manufacturing capacity at key foundries like Micron, SK Hynix and Samsung months and even years in advance.

The result is a drastic reduction in the supply available to the mobile industry. The structural shortage has driven up prices for the chips that Nothing and other competitors assemble on their logic boards. Pei exemplified the problem by revealing that the planned memory costs for the original design of the Nothing Phone (4a) doubled before mass production, and have doubled again recently.

Distribución del Coste de Hardware (Estimado 2026)
┌──────────────────────────────────────────────────┐
│   Memoria (DRAM + NAND Flash): >50%              │
├─────────────────────────┬────────────────────────┤
│   Procesador (SoC): 25% │   Pantalla / Resto: 25%│
└─────────────────────────┴────────────────────────┘

More expensive cell phones and no seasonal sales

The increase in bill of materials (BOM) has pushed the average retail prices of smartphones by up to $100 increase compared to their previous generations.

Carl Pei also warns consumers that aggressive seasonal sales or regular discounts in sales campaigns will be rare in the coming months. Since memory allocation is strictly rationed by chip manufacturers, there will be no overproduction of devices that justifies liquidating stock at cost price.

For the user looking to renew their terminal, the advice from Nothing's CEO is pragmatic: waiting for prices to drop is not a viable strategy in the short term, since chip shortage projections extend well into next year.

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Frequently Asked Questions (FAQ)

Why are the prices of smartphones rising in 2026?

Mainly due to the massive increase in the cost of memory chips (DRAM and NAND Flash). These costs have doubled due to strong shortages and high competition for components.

How does the artificial intelligence race affect the cost of mobile phones?

Large technology companies and data centers dedicated to AI monopolize the manufacturing capacity of DRAM and HBM memory. This reduces the supply available for mobile devices and raises prices globally.

Which mobile phone components have become more expensive?

Random access memory (RAM) and physical storage (NAND Flash). The CEO of Nothing indicates that today memory can represent more than 50% of the total hardware cost of a phone.