It was cheap smartphones from China that dominated the global market for more than a decade facing serious challenges. The rise in chip memory prices due to a surge in demand for artificial intelligence (AI) and geopolitical tensions disrupting the semiconductor supply chain are making the business model of cheap phones increasingly difficult. Smartphone manufacturers are now struggling to set selling prices because component costs, especially memory chips, continue to change. High demand for memory chips for AI servers is causing memory producers to shift production from conventional memory to memory for AI servers, thus reducing the supply of memory for consumer devices such as smartphones. As a result, DRAM and NAND flash prices have risen significantly, making cheap phones potentially rarer on the market.
