Qualcomm issues a warning on memory chip shortages

The memory crunch is here, and it’s already hitting phones, PCs, and game consoles.

High-bandwidth memory is being swallowed by AI data centers so fast that consumer tech is getting rationed.

This week, Qualcomm (QCOM) and Arm Holdings (ARM) confirmed what hardware teams have been whispering for months.

There isn’t enough memory to go around, and smartphones are first in line to lose.

HBM is the bottleneck. FYI, we wrote about memory as one of the 4 AI bottlenecks here. The ultra-fast memory is what AI accelerators need to run large models. The same supply chain also feeds phones, PCs, and consoles. Data centers are outbidding everyone else. Prices are rising. Volumes are getting cut.

Qualcomm CEO Cristiano Amon told analysts that memory pricing and availability will define how big the market can be this year. Chinese customers are already planning fewer devices. Arm backed that up, warning that near-term smartphone growth will slow because components just won’t be there.

This isn’t limited to one region. AI infrastructure is crowding out phones and PCs. Micron Technology says the shortage worsened last quarter and will stretch beyond this year. MediaTek says conditions keep shifting. Intel CEO Lip-Bu Tan says relief could take years.

Even gaming isn’t safe. Nintendo stock has slid as investors price in margin pressure from higher memory costs. A basic 64GB DDR5 kit has jumped sharply in price over recent months. That’s the consumer-facing symptom of a deeper structural change.

The disruption behind the news: Electronic device manufacturers will struggle..

Data centers are now the premium customer for memory suppliers.

They sign long contracts, accept higher prices, and buy at scale.

Consumer electronics can’t compete with that economics.

Data centers are expected to consume about 70 percent of high-end memory output this year. That leaves the remaining 30 percent to be split across phones, PCs, consoles, and everything else. There’s no elasticity left in the system.

This flips the old cycle. In the past, memory scaled on consumer volume, then filtered up to enterprise. Now AI soaks up capacity first, and consumers get whatever’s left. That means fewer SKUs, shorter product lines, and higher prices for midrange devices. It also means weaker competition. Smaller OEMs without long-term supply deals get squeezed out.

Chinese phone makers already see it coming. Reports say Xiaomi, Oppo, and Transsion are cutting 2026 shipment targets, with Oppo trimming as much as 20 percent. If that holds, global unit growth doesn’t just slow. It reverses.

What to watch next

Over the next 6 to 24 months, watch three things.

First, memory contract pricing.

If AI buyers keep locking up multi-year supply at premium rates, consumer relief won’t come.

Second, device configurations.

Expect lower base storage and fewer high-end options outside flagship phones.

Third, consolidation.

Brands without scale or privileged access will exit markets or get acquired.

For businesses, this means planning for higher hardware costs and longer replacement cycles. For consumers, it means paying more or settling for less. For the market, it means AI wins every allocation fight.

Memory chip shortage is not a temporary squeeze. AI has claimed the memory supply chain, and consumer tech is now living downstream from that decision. Something tells me smartphones will cost more in 2026.

Qualcomm (QCOM) and Arm Holdings (ARM) have a Disruption Score of 3 and 4 respectively.

Click here to learn how we calculate the Disruption Score.