AI-fueled chip shortage drives up smartphone prices

DW News · Feb 12, 2026 · Collected from RSS

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The benefits of artificial intelligence (AI) may come at a high cost for consumers. Surging demand for memory chips is driving up the price of smartphones and computers — including in Germany. "The AI boom, along with the massive investments in infrastructure and data centers that come with it, is having a noticeable impact on the memory chip market," Wolfgang Weber, CEO of the German Electro and Digital Industry Association (ZVEI), told DW. "According to analyses by the World Semiconductor Trade Statistics (WSTS) institute, prices for these chips rose by 50% last year," Weber said. As a result, consumers may face not only longer delivery times but also higher prices for electronic and digital devices. "Bottlenecks in such key technologies pose a serious problem for our economy," the association's head warned. "The chip shortage alone between 2021 and 2023 caused more than €102 billion ($121 billion) in economic damage in Germany." Boom in the semiconductor market The latest figures from WSTS underscore the industry's rapid growth (see chart). In the first half of 2025, the global semiconductor market reached $346 billion (€293 billion) — an increase of 18.9% compared with the previous year. Overall, WSTS forecasts 22% growth for 2025, bringing the market to $772 billion. For 2026, it expects an even sharper rise of more than 25%, pushing the market to $975 billion. By how much smartphone prices could increase has been examined in a study by the market research firm IDC (International Data Corporation). "In a moderate scenario, average smartphone selling prices could rise by 3 to 5%," the study states. "In a pessimistic scenario, they could increase by as much as 8%." Experts warn of a turning point. The age of cheap, plentiful memory and storage is ending. In 2026, technology is set to become more expensive — not because demand is booming, but because supply can't keep up. Samsung: Smartphones will become more expensive In late January, Samsung Electronics President Wonjin Lee announced potential price increases in an interview with Bloomberg. "Prices are going up," Lee said, adding: "Obviously, we do not want to convey that burden to the consumers. But we're going to be at a point where we have to actually consider repricing our products." Apple, meanwhile, has not publicly commented on possible price increases. However, analysts at investment bank Morgan Stanley predict in their 2026 outlook that the company will likely keep prices for its base model stable at a high level, while potentially charging more for devices with larger storage capacities.More memory, higher costs for smartphones The use — and cost — of memory chips in smartphone production has risen sharply over the past five years. According to industry data, memory accounted for around 8% of total component costs in a device such as the iPhone 12 Pro Max in 2020. By September 2025, that share had climbed to roughly 10% in the iPhone 17 Pro Max. Due to the ongoing rise in memory chip prices, analysts at research firm Counterpoint Research estimate that this share could even increase to as much as 20%.Chip shortages and rising costs are driving up the prices of many top-tier smartphonesImage: Hector Retamal/AFP German market stagnates In light of the current chip shortages, Germany's digital industry association Bitkom expects a period of stagnation — or even a slight decline — in the domestic market. "Consumer demand in Germany is generally rather weak at the moment," Sebastian Klöß, Head of Markets and Technologies at Germany's digital association, Bitkom, told DW. Still, industry revenues continue to post steady — albeit modest — growth. However, this is largely due to continuously rising device prices. According to a Bitkom study, the average price of a new smartphone in Germany increased from €591 ($704) in 2024 to €605 ($720) last year. Refurbished smartphones are the winners In contrast to sluggish demand for new devices, the market for used smartphones is experiencing strong growth. According to a joint analysis by market research firm NIQ, the Society for Consumer Electronics (GFU), and IFA Management, refurbished smartphones reached a 9% market share in the EU in July 2025. In January of last year, the figure had been just 5%. "In some markets, refurbished models now account for more than 40% of online sales in the sub-€600 segment," the analysis states. "Refurbished devices are evolving from a niche product into an established force in the market." This piece was originally published in German. Surviving globalization: Part 1 — smartphone warsTo view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video