---
title: "The Death of Budget Smartphones: How AI and Memory Monopoly Are Destroying the Electronics Market"
description: "AI is consuming 60% of global memory production, threatening the disappearance of $220 smartphones by 2027. The monopoly of three giants and chip shortages are leading to record sales drops and rising prices. The era of cheap electronics is ending. 📉📱🤖"
date: 2026-07-06T12:40:00.000Z
lang: en
url: https://xab.info/en/posts/death-of-budget-smartphones-memory-crisis-and-ai
tags: []
publisher: "XAB.info"
---

# The Death of Budget Smartphones: How AI and Memory Monopoly Are Destroying the Electronics Market

![Person holding a modern smartphone with advanced camera — symbol of how AI and memory monopoly are eliminating budget phones from the market](https://xab.info/media/2026/07/06/smert-byudzhetnykh-smartfonov-krizis-pamyati-i-ii/smert-byudzhetnykh-smartfonov-krizis-pamyati-i-ii-1.webp)

The global electronics market stands on the brink of an unprecedented transformation. Artificial intelligence, which has been developing rapidly in recent years, is beginning to demonstrate its "appetite" for resources: according to industry experts, AI systems will soon consume more than 60% of the world's RAM production. This event is becoming a catalyst for a deep crisis, the consequences of which are already being felt by consumers around the world.

### Monopoly of Three Giants and Price Surge

The crisis in the microchip market is not a spontaneous phenomenon. Since 2022, there has been a rapid increase in the cost of DRAM memory, which at peak moments reached an incredible 700%. The situation is exacerbated by hypertrophied production concentration: about 90% of the entire global market is controlled by just three corporations — Samsung, SK hynix, and Micron.

This oligopoly creates a unique situation where even collective lawsuits against companies are unable to stop the rise in semiconductor costs. The market has found itself in a trap where demand for chips for data centers and neural networks exceeds the capabilities of traditional production.

### Disappearance of a Device Class

According to a report by the analytical resource MyDrivers, by the end of 2026, more than half of the world's memory production capacity will be used exclusively in the cloud computing and AI industry. This will lead to a radical change in the retail landscape.

Experts predict the complete disappearance of smartphones costing around $220 from stores by 2027. The reason lies in the change in the cost structure: due to shortages, the cost of purchasing only memory modules and storage drives will account for up to 60% of the total cost of a smartphone. It will simply not be economically viable for manufacturers to release budget models.

### Record Sales Drop and Supply Deadlock

The research company IDC forecasts that total smartphone shipment volumes will fall to the lowest level since 2013. A similar rapid decline is expected for the personal computer market as well. Attempts by brands to find alternative sources of supply are meeting serious restrictions.

Some relief could be provided by Chinese factories CXMT and YMTC, which have no problem fulfilling internal orders for Huawei, Xiaomi, or OPPO. However, cooperation with them is blocked for global companies by strict regulatory rules and sanctions.

### The Fight for Survival: From Apple to Lenovo

Under these conditions, the largest players are forced to seek non-standard solutions. Currently, Apple is conducting active lobbying negotiations with the Donald Trump administration, trying to find a way out of the supply crisis. However, according to estimates by industry analyst Ming-Chi Kuo, even the potential involvement of Chinese manufacturers like CXMT in Apple's supply chains would only reduce the physical risks of not receiving chips, but would in no way lower their final cost for the consumer.

In current conditions, the main task for brands is the physical reservation of some volume of memory at factories, rather than negotiations about discounts. Representatives of Lenovo have already called on users to get used to the current pricing policy, noting that the era of ultra-cheap and simultaneously functional electronics is ending.