Smartphone buyers will have to be prepared for higher prices as Nothing CEO Carl Pei has said that memory has now become the most expensive component in smartphones, surpassing processors and displays. Memory costs can account for more than 50 percent of the hardware bill in smartphones, changing the economics of smartphone manufacture, Pei said.
Pei explained that for the upcoming Phone (4a), memory costs doubled between the decision to build the device and its launch, and have doubled again since. This rapid escalation is happening faster than industry predictions, creating major challenges for smartphone makers worldwide.
The impact is already being felt in retail prices. Since February 2026, new smartphones have been launched at prices that are up to $100 higher than their predecessors. In India, premium phones priced above ₹30,000 have been at a premium of ₹7,000 or more, which is indicative of a global supply crunch.
Pei advised consumers against the tendency to “buy ahead” in case of shortages. He said memory is allocated, not bought, in these cases, which means manufacturers get less at current prices, regardless of demand. This system of allocation prevents firms from storing memory to cover rising prices.
The warning also extends to upcoming sale seasons. Pei noted that discounts will be far smaller than consumers are used to because manufacturers will have to absorb surging component costs. For buyers waiting to upgrade, he said, “the best time was yesterday, the next best time is now,” in the face of the urgency of the situation.
Industry analysts agree that the memory costs are rising worldwide because of supply chain disruptions, growing demand for AI-based gadgets, and limited production capacity. And more and more smartphone manufacturers are adding large memory modules to support the latest technology and will do so in 2027.
Carl Pei’s comments demonstrate a major shift in smartphone economics. As memory costs rise, phone prices are going to continue to rise and consumers will find even less chance of bargains and will have to re-evaluate their upgrade plans.
