Omdia projects global shipments of sub-$400 smartphones will plummet over 22% this year, dragging the entire smartphone market down 12% year-over-year, due to skyrocketing DRAM and NAND flash contract prices. Memory now comprises up to 64% of the total manufacturing cost for lower-tier smartphones, as SK Hynix, Samsung, and Micron aggressively redirect wafer starts to high-margin HBM for AI data centers. South Korea unveiled an $870 billion 10-year investment framework with Samsung and SK Hynix to double national memory output within five years, with new mega-fabs planned in Yongin and Cheongju.
AI's insatiable HBM demand is structurally reallocating global memory capacity, driving up commodity DRAM/NAND prices and forcing a retreat from the budget smartphone market.