The crisis in the DRAM and NAND flash memory market is starting to significantly shift the balance of power among smartphone makers. According to TrendForce, in the first quarter of 2026, Xiaomi cut smartphone production by nearly 40%, while Apple managed to notably increase iPhone output thanks to strong demand for the iPhone 17 series.
Since fall 2025, DRAM and NAND prices have surged sharply. The reason is the high demand for memory from companies developing artificial intelligence, including major players like OpenAI. This pressure affects not only component buyers but also manufacturers of laptops, desktops, and smartphones, who must either raise prices or reconsider production volumes.
In total, 284 million smartphones were produced in the first quarter, down 1.7% year over year. TrendForce notes that the memory crisis effect is still delayed: many companies are using DRAM stockpiles purchased earlier, and fears of further price increases even boosted demand. However, for the full year, analysts expect a more serious production drop of 16.2%, to 1.051 billion devices.
Manufacturers of more affordable smartphones are hit hardest. According to TrendForce, Xiaomi produced 38% fewer devices than in the same period last year. For vivo, the decline was milder, at about 8%. For companies operating in segments with lower average selling prices, rising memory costs are especially painful because they are harder to pass on to buyers without losing competitiveness.
Producers of more expensive devices are feeling more confident. Samsung managed to increase smartphone output by 2%, while Apple boosted it by a full 20%. Apple's growth is linked to the popularity of the iPhone 17 lineup, which allowed the company to ramp up production despite rising component costs.
If TrendForce's forecast holds, the smartphone market in 2026 could become even more polarized. Brands with high-end models and strong margins will have more room to maneuver, while mass-market device makers will have to choose between cutting production, raising prices, or accepting lower profits.