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An enormous cause for that is that now chip manufacturing corporations are altering the main target of their manufacturing. As a substitute of reminiscence utilized in smartphones, they’re focusing extra on making high-bandwidth reminiscence (HBM) required for high-performance computer systems and AI knowledge facilities. Because the demand for AI servers and knowledge facilities is growing, the necessity for HBM can be growing.

As a consequence of this growing demand, smartphone corporations have began advance buying of chips in order that the scarcity of provide could be averted. However by doing this, the steadiness of demand and provide out there has worsened resulting from which the costs of reminiscence chips like LPDDR4X are anticipated to extend by greater than 10% on this quarter.

In line with Counterpoint Analysis analyst Parv Sharma, this whole change is going on because of the growing wants of AI servers. Chip producers are actually displaying extra curiosity in making HBM as it’s giving them greater income and higher returns in comparison with smartphone elements.

Not solely this, the costs of NAND flash storage utilized in smartphone manufacturing has additionally began growing. In line with TrendForce, it’s doable that their costs might improve by 5 to 10% on this quarter.

In such a state of affairs, specialists consider that within the coming months, smartphone corporations could have solely two choices, both they are going to minimize the options of their units or they are going to go the burden of elevated prices straight on the shoppers. Which means low cost smartphones might now not be as low cost as earlier than.