Readers have been briefed on the emerging global high-bandwidth memory (HBM) supply crunch, driven by soaring data center demand. We have tracked the progression of this theme for months through what seem to be almost weekly developments, ranging from notable institutional research desks and industry insiders to more recent warnings from electronics device companies about looming shortages and price spikes.
Now, market research firm International Data Corporation (IDC), which tracks handset shipments, has issued an apocalyptic warning: the smartphone market is headed for a historic downturn due to a memory crunch.
IDC estimates that global smartphone shipments will plunge 12.9% in 2026 to 1.1 billion units, the lowest annual level in over a decade. This outlook is much gloomier than IDC's November forecast.
“What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain, with ripple effects spreading across the entire consumer electronics industry,” wrote IDC Vice President for Worldwide Client Devices, Francisco Jeronimo.
Jeronimo continued, “The global smartphone market, particularly Android manufacturers, faces a significant threat. Vendors whose business is mainly at the low end of the market are likely to suffer the most."
"Rising component costs will hit their margins, and they will have no choice but to pass the costs on to end users. By contrast, Apple and Samsung are better positioned to navigate this crisis. As smaller and low-end-positioned Android vendors struggle with rising costs, Apple and Samsung could not only weather the storm but potentially expand market share as the competitive landscape tightens," he explained.
IDC Senior Research Director Nabila Popal, who was quoted by Bloomberg, said, "The tariffs and pandemic crisis seem a joke compared to this."
Popal warned, “The smartphone market will witness a seismic shift by the time this crisis is over — in size, average selling prices and competitive landscape. We don’t expect the situation to ease up until mid-2027, at least.”
Counterpoint, another research firm that tracks handset shipments, published a similarly dire forecast earlier today, warning of a 12.4% decline in global smartphone sales this year. The note also warned of a “full-scale supply shock” related to the HBM supply crunch.
“2026 is shaping up to be the worst year in smartphone history,” Counterpoint analyst Yang Wang said. “The industry has never seen a drop this steep.”
As the memory crunch storm approached, we told readers to prepare:
Goldman's Meeting With Top Memory Supplier Points To Higher Prices As Crunch Worsens
That Escalated Quickly: Goldman Cuts PC Shipment Outlook As Memory Prices Go Parabolic
Professional subscribers have been provided with notes on the memory crunch storm and can read them on our new Marketdesk.ai portal.
