Smartphone prices to rise in India as AI-driven chip shortage fuels ‘RAMageddon’ fears

Smartphone prices in India are likely to witness a sharp increase as rising costs of memory and storage chips begin impacting major brands, with industry experts warning that devices could become significantly more expensive in the coming years.

Several smartphone makers, including OnePlus, Nothing, Redmi, Realme and Motorola, have quietly revised prices upward across multiple models in recent months.

While some mid-range devices have become costlier by ₹2,000, certain flagship smartphones have reportedly seen price increases of ₹5,000 to ₹6,000.

Industry analysts attribute the trend to a growing global shortage of DRAM and NAND memory chips, key components used in smartphones, laptops, gaming consoles and servers, amid surging demand from the artificial intelligence sector.

AI industry driving chip demand

Technology companies such as OpenAI, Google, Microsoft and Meta are rapidly expanding AI infrastructure and data centres globally, increasing demand for high-end memory chips.

As a result, manufacturers that traditionally supplied memory components for smartphones are now allocating a larger share of production towards AI-related requirements, pushing up costs for consumer electronics companies.

Nothing. Founder Carl Pei had earlier indicated that rising DRAM and NAND prices were forcing companies to pass the additional burden on to consumers.

According to reports, prices of certain memory chips have risen sharply compared to last year.

Prices rise across segments

The impact is now visible across the Indian smartphone market.

The starting price of the OnePlus 15 has reportedly increased from around ₹72,999 at launch to nearly ₹77,999, while the OnePlus 15R has also become costlier by roughly ₹5,000.

Similarly, the Nothing Phone 4a Pro has reportedly seen its price rise from ₹39,999 to around ₹44,999.

Several Redmi and Realme models have also witnessed increases ranging from ₹2,000 to ₹5,000.

Industry observers noted that the trend is no longer limited to premium devices, with mid-range and budget smartphones also being affected.

Budget segment under pressure

Between 2016 and 2023, Indian consumers saw rapid improvements in smartphone specifications at lower prices, with features such as 5G connectivity, 8GB RAM and large storage capacities becoming common even in affordable devices.

However, analysts believe that the period of aggressive pricing may now be ending.

Research firm Counterpoint Research has projected that the average selling price of smartphones could rise by around 7% in 2026 as component costs continue increasing.

Retailers have also reported that fresh supplies of older models are arriving at higher prices, suggesting the impact may spread further across the market in the coming months.

Some reports have warned that if shortages of RAM and NAND chips continue, prices of certain devices could rise by 20 to 40% over the next one to two years, particularly in smartphones equipped with higher RAM and storage capacities.

Shift towards premium devices

TM Roh, the head of Samsung’s mobile division, has also acknowledged that AI-driven infrastructure demand is increasing the cost of smartphone components.

Analysts believe companies may increasingly focus on premium devices as rising production costs make low-margin budget smartphones harder to sustain.

The trend could particularly affect India, where a large section of consumers typically purchases smartphones priced between ₹15,000 and ₹30,000.

Experts said even modest price increases in this segment could delay purchasing decisions, potentially contributing to slower growth in India’s smartphone market.

The rising prices are also expected to boost demand for refurbished devices as consumers hold on to older smartphones for longer periods.

Industry experts believe supply conditions may not stabilise before 2027 despite efforts by memory manufacturers to expand production capacity.