AI Boom to Raise Prices for Computers and Smartphones
Last updated January 23, 2026
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Planning to purchase a new computer or smartphone this year? Buying soon could save you hundreds of dollars, as manufacturers are forced to pay higher costs for solid-state drives (SSDs) and computer memory (DRAM and NAND) in the months ahead.
The culprit: “An unprecedented memory chip shortage” caused by the explosive growth of artificial intelligence (AI), according to a recent report from International Data Corporation (IDC), a global technology research firm.
AI data centers require massive amounts of data storage, and major chipmakers have shifted production to meet that demand. As a result, they’re making fewer components for general-purpose consumer products, such as computers and smartphones, and that’s driving up prices.
“For consumers … this signals the end of an era of cheap, abundant memory and storage, at least in the medium term,” the IDC report concluded. “The year 2026 is shaping up to be one in which technology becomes more expensive, driven by supply constraints rather than demand growth.”
Jitesh Ubrani, an IDC research manager, told Checkbook he expects prices for PCs, tablets, and smartphones to increase by 10 to 20 percent before the end of the year. He said the computer component shortage will also impact car manufacturers, which rely on chips to control everything from engines and safety systems to navigation and entertainment.
“If you look at prices right now, versus what they were in December, there’s not that big of a change,” Ubrani said. “Device makers saw this coming, and so they front-loaded on inventory. But this is expected to happen in a more meaningful way, probably in the second half of this year.”
IDC predicts the supply/demand imbalance for consumer-related memory and storage components could last until 2027 or longer, as chipmakers shift production to meet demand from AI customers.
“This is not just a cyclical shortage driven by a mismatch in supply and demand, but a potentially permanent, strategic reallocation of the world’s silicon wafer capacity,” the IDC report noted.
Chip shortages “could make 2026 one of the most expensive years ever for consumer electronics,” Nicholas De Leon, senior home and tech writer at Consumer Reports, wrote in a recent blogpost.
How Will Manufacturers Compensate for Higher Costs?
Faced with higher prices, electronics companies like Dell, HP, and Samsung are expected to focus on their most profitable products. IDC predicts that fewer models will be targeted at the lower end of the market, since higher-end models are more profitable.
That’s what’s happened in the auto industry. During the pandemic, automakers realized they could pull in more profits by focusing on luxury vehicles rather than affordable sedans, even if that meant selling fewer cars overall.
When it comes to consumer electronics, we’ve come to expect more features for less money year after year. Not anymore.
An easy way manufacturers can minimize price increases, especially on their lower-end models, is to cut some corners—a practice called “shrinkflation.” Industry-watchers expect some electronics companies to quietly redesign their products and downgrade the quality of their components.
“The $600 laptop you buy in 2026 might look identical to the 2025 model, but under the hood it may have a dimmer screen and 8GB of RAM instead of 16GB,” De Leon explained.
When comparing computer or phone models, check the specs. If you’re using your computer to browse the web or do email, most new devices will come with sufficient memory and storage. But if you’re a power user or gamer, you’ll experience latency issues if your device doesn’t have adequate memory or a fast enough SSD or graphics processor. Prices for all three of these types of components will be affected by the shortage.
“You definitely need to pay close attention [to the specs] as to what’s being included and make sure it’s more than enough to do what you need to do,” IDC’s Ubrani said.
And since you’ll probably use a new device for several years, will it be fast enough for future uses?
How to Spend Less
Aside from buying before prices jump, you can usually save by going with an older model, rather than the latest, greatest thing. Consumer Reports notes that year-to-year improvements are rarely that significant; you may never notice the difference if you buy a product that launched a few years ago.
Refurbished models can also save you a bundle. These devices have been cleaned up and restored to like-new condition. For example, you can buy a certified 256GB Galaxy S25 from Samsung for $709. That’s $150 less than the new version.
Buy a certified refurbished product from the manufacturer or a major retailer, and ensure it comes with a warranty.
As with other expensive purchases, it’s important to shop around. Checkbook’s undercover shoppers found large store-to-store differences when they collected prices from major retailers for several models.
“Nobody really knows what's happening,” De Leon said. “With so much uncertainty, it really just pays to do your homework, shop around to make sure that you're getting the best price possible.”
Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Blue Sky, X, Instagram, and at ConsumerMan.com.