The global boom in artificial intelligence is driving up the cost of memory and AI-specific chips, leading to higher smartphone prices [1, 2].

This trend threatens to make mobile technology less accessible. As the hardware requirements for AI models increase, the cost of essential components rises, which manufacturers then pass on to consumers [1, 2].

Modern AI models require substantially more RAM and dedicated AI processors to function effectively [1, 2]. This demand has created significant supply pressure on the global memory and AI chip markets, pushing the overall cost of these components higher [1, 2].

While high-end devices often absorb these costs through premium pricing, the impact is more severe for budget devices. In low-end phones, the cost of memory as a share of the total bill of materials has risen from under 10% to over 40% [1].

Smartphone manufacturers are now forced to navigate a market where the basic building blocks of mobile computing are becoming more expensive due to the AI race [1, 2]. This shift affects the entire global smartphone market, as the reliance on specialized silicon grows to support on-device intelligence [1, 2].

“The AI boom is driving up the cost of memory and AI‑specific chips.”

The shift in component costs suggests that the 'AI phone' era may inadvertently widen the digital divide. Because memory costs are consuming a much larger percentage of the budget for low-end devices, manufacturers may either raise prices for entry-level consumers or reduce the quality of other hardware components to maintain their price points.