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AI led memory shortage reshaping consumer electronics demand

ICICIdirect Research 26 Jun 2026 DISCLAIMER

Memory chip industry is in a structural super-cycle with prices surging since H2CY2025, driven by strong demand from AI data centres esp. on high bandwidth memory (HBM) side. Leading suppliers i.e. Samsung, SK Hynix, and Micron have increasingly prioritized production of higher-margin HBM and enterprise memory, tightening the availability of commodity DRAM and NAND used across smartphones, laptops and other consumer electronics. While the three companies dominate the global DRAM market with  ~90%+ share and are making investments, meaningful capacity additions are unlikely before CY27-CY28, suggesting supply constraints are likely to persist for a while.
Select DRAM and LPDDR contract prices have thus increased nearly 3.5-5x since Oct’25, resulting in a sharp rise in memory costs for consumer electronic OEMs. Consequently, smartphone and PC manufacturers have started implementing price hikes, reducing memory configurations in certain models and delaying product launches to protect profitability. Industry reports suggest mobile phone volumes to have declined 12-15% YoY in June, with entry-level devices expected to bear the maximum impact. Budget phones have seen the steepest increase at ~20-40%, while premium phones (better hedged via high realisation and supplier relationships) have seen a more moderate ~13-15% hike.
For Dixon Technologies, which derives 75%+ of its revenue from mobile phones and IT hardware, weak industry volumes could moderate near-term volume growth. However, increasing exports, customer additions and a richer product mix are expected to partially offset the impact of lower shipments while pending Vivo JV will be the key driving factor. Besides, Syrma has single digit exposure to laptop segment wherein better realisation could be supportive while EBITDA being maintained.  
Separately, although there are no direct beneficiaries of memory card price increase among Indian listed players, companies like GNG electronics who are into refurbishment of laptops and phones will be indirect beneficiaries. Rising prices for new devices are likely to accelerate demand for refurbished laptops and smartphones, providing a favourable demand environment for the company.
Meanwhile, players like Micron, Tata electronics, etc are making significant investments to build major semiconductor assembly and testing facility in India. Union minister Ashwini Vaishnaw stated new companies are likely to invest in India to manufacture memory chips as strong demand for memory (data storage) cards and advanced chips has tightened global supplies. ISM 2.0 is awaited but broadly the government remains focused to develop India’s electronics manufacturing ecosystem wherein Amber, Syrma, Dixon, Epack durable are among our preferred picks.

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