On December 4, reports emerged indicating that since the fourth quarter of this year, the memory sector has witnessed a surge in price increases. The costs of upstream memory chips have been steadily rising, setting off a ripple effect throughout the downstream consumer electronics market. Wu Yating, the Senior Research Associate Vice President at TrendForce, urges consumers who haven't bought mobile phones yet to make their purchases promptly, as it's anticipated that prices will go up next year.

She highlights that the present price hike cycle for memory chips could endure longer than the previous eight - quarter cycle, which will ultimately lead to a general hike in smartphone prices. The main driver behind the current price spike is the soaring demand for AI servers amid the AI craze. This has pushed manufacturers to allocate more production capacity towards high - end memory products essential for AI systems, such as HBM and DDR5. Consequently, there's a shortage in the supply of conventional memory chips like LPDDR4.

Wu Yating forecasts that as manufacturers gradually phase out LPDDR4 production, its proportion in the total LPDDR supply will plummet to 26% by 2026. In contrast, the supply share of LPDDR5 will skyrocket to 73%. Given the combined demand from mobile phones and AI, the supply of LPDDR5 will stay tight. It's expected to encounter supply shortages and price hikes next year, which will further push up the costs of smart devices.