In November 2025, a rugged, high-speed 1TB portable external SSD cost around ₹14,000. Today, that same drive will set you back by ₹21,000. Storage, processors, DDR5 memory — pricing has shot through the roof across the board. Even a global tech giant like Apple is not immune.
The culprits? OpenAI, Google, Anthropic, Meta and other tech giants locked in a battle to win the artificial intelligence race, one that demands ever-greater quantities of memory chips for the data centres powering the technology.
This is not a consumer-driven shortage. Memory chip manufacturers are making far more money selling expensive chip varieties to AI data centres than to PC and smartphone companies, and they are redirecting production accordingly.
“The memory tightness will continue not only this year but through 2029, as we move from generative AI to the agentic era, pushing memory demand even higher,” Neil Shah, research vice-president at technology market research firm Counterpoint Research, told
The Telegraph.
Essentially, anything with memory is being affected.
The root of the problem lies in market concentration. Only a handful of companies produce the world’s entire memory supply, and they have realised they can earn billions more by manufacturing RAM for AI data centres.
Some see a silver lining — once the AI bubble bursts, cheap hardware will flood the market — a boon for home PC builders. That logic might have held in the past. The RAM being produced today is either integrated into specialised GPUs incompatible with ordinary computers, or fitted into memory modules that do not work on standard machines. The GPUs and servers being deployed now require specialised power and cooling infrastructure, forming part of massive server systems that take considerable effort to operate.
For context, consider how smartphone pricing has evolved. The original iPhone launched in 2007 at $499. Samsung’s first Galaxy S arrived in 2010 at a similar price. It was not until 2017 that the iPhone X crossed the $1,000 mark — at $999 — and the floodgates opened.
What followed was a procession of “Pro” and “Ultra” models, each seeking to justify higher price tags with tangible hardware improvements — better OLED panels, more sophisticated cameras, incremental but real upgrades. Consumers grumbled, but largely paid up.
In 2026, the price jump is driven by none of those factors. This is not a new form-factor premium. Nor is it the supply chain chaos of 2020, when pandemic restrictions wreaked havoc on global manufacturing. This time, the cause is structural.
Some manufacturers may even resort to stripping memory components from older systems just to maintain stock. Compared to players in the AI space, smartphone manufacturers have been pushed to the back of the queue, forced to pay a steep premium for access to the hardware they need. The ongoing tariffs of the Donald Trump administration are complicating matters further.
So what does this mean for anyone buying a smartphone this year?
If you are not prepared to go off-grid, or to simply carry on with whatever is already in your pocket, you will face some difficult choices. Whether you are overdue for an upgrade or your current device recently met an untimely end, a new phone will be unavoidable for many this year.
We are looking at a world where $1,200 (nearly ₹1,15,000) is the new baseline for a “pro” model. For an “ultra” or fold-format device, it is substantially more.
Some manufacturers are compensating with design changes. If a device looks too good for its price, ask how much RAM and storage it is actually offering.
Resale values are shifting too. In a normal year, technology depreciates faster than a new car. But 2026 — and quite possibly 2027 — will be anything but normal. More people will flood the secondary market in search of deals, which means your current device may hold its value far better than its predecessors did.
This is an excellent time to look after what you already own. A screen protector, a sturdy case, a battery replacement if needed; small investments that could pay off meaningfully when you eventually sell or trade in.
Many will have to settle for last year’s hardware rather than chasing the latest release. A 2025 flagship phone at a discounted price is genuinely good value right now. If the battery is troubling you, replace it. You will be in a better position than buying new.
Analysts predict that budget devices will face the steepest percentage price increases. With a lower ceiling, manufacturers have less room to absorb rising costs, unlike premium makers.
By the time the memory supply chain stabilises, the era of affordable technology may well be behind us.