Memory chip manufacturers like Samsung, SK Hynix, and Micron are prioritizing high-bandwidth memory (HBM) production for AI accelerators due to higher profitability, reducing standard memory capacity for consumer electronics. This shift has caused smartphone prices in India to rise by 4-68% depending on the model, leading to a 10% year-over-year decline in Q2 smartphone shipments, the steepest June-quarter fall in six years. Consumers are delaying upgrades, extending replacement cycles from 3.5 to 4 years, with the sub-$210 segment most affected.
AI's demand for HBM is directly reallocating memory supply, causing price hikes and shipment declines in consumer electronics, particularly in price-sensitive markets.