Here we go again! We've been through all of this before, but here comes the bad news. Smartphones are most likely going to be even more expensive next year, as AI data centers buy out SanDisk's memory supply.
SanDisk's memory supply is locked in until 2028
Two-thirds of SanDisk's memory supply for 2028 is already locked into long-term deals with AI data centers. | Image by SanDisk
During its quarterly earnings call, SanDisk disclosed the depressing information that about two-thirds of its memory supply for 2028 is already locked into long-term deals with AI data centers. Another piece of bad news is that SanDisk expects the demand for memory chips to grow twice as fast as supply in 2027.
What this means is more memory shortages in other market areas, such as smartphones, PCs, consoles, and every piece of consumer electronics that uses onboard memory. SanDisk posted $11.03 billion in revenue for the quarter in question, a whopping 378% increase from a year ago.
Almost half of that came from data centers at $4.80 billion, up 61% in just three months. The picture is clear.
Smartphone manufacturers struggle for scraps
SanDisk sells most of its chips via long-term contracts called NBMs. These contracts run years in advance, and according to the company’s CFO Luis Visoso, "about 50% of SanDisk bits are under NBM for ’27 and about 2/3 for ’28."
What this means is that smartphone manufacturers like Samsung and Apple will continue to struggle to secure enough memory chips for their upcoming models. SanDisk CEO David Goeckeler added that many customers (AI data center operating companies) have underestimated the memory needed for their infrastructures and are coming back for more.
Recommended For You
Brace yourselves as more bad news is coming.
No relief in the foreseeable future
AI data centers memory demand will continue exceeding supply capabilities throughout the end of the decade. | Image by Microsoft
What's even more alarming is that Visoso thinks that these NBM contracts exceed SanDisk supply capabilities "throughout the end of the decade."
So, the situation won't change significantly in the next couple of years, and most likely into the 2030s. If you thought flagship smartphones were expensive now, you might be unpleasantly surprised next year or the year after.
Would you pay more for the next flagship phone or buy an older flagship at a discount?
1 Votes
Smartphone price hikes are already hitting the end customer
The Galaxy S27 Ultra is expected to start at $1,500. | Image by IceUniverse
We've already started seeing the initial impact of all this. Samsung's own memory foundries are struggling to supply chips for clients, let alone the company's own Galaxy phones, and the prices are skyrocketing.
Other chip manufacturers such as SK Hynix and Micron are also struggling to meet the demand from AI data centers. And while this means massive revenue for these companies, the result for the end customer is rather depressing.
Apple and Samsung have already hiked the prices of their current smartphone lineup, Apple also did it retroactively for the iPhone 17 series, and more price hikes are expected for the upcoming models. The Galaxy S27 Ultra, for example, could start as high as $1,500 and higher storage variants could pass the $2,000 threshold.
Should you buy a new phone now or wait?
Many people are getting frustrated and disappointed by the looming price hikes and are starting to explore other options. The question above is complex and multi-layered. If you want the best model out there, you should be prepared to pay extra, that's for sure.
The alternative is to wait for the next wave of flagships to come, and buy the current generation at a discount. With the incremental upgrades most phone brands offer, coupled with the long software support, that might be the most sensible option.
Would you pay more for the next flagship phone or buy an older flagship at a discount?
Read more news about memory shortages and price hikes here:
Get a free Galaxy A17 with Straight Talk. To claim this deal, you need to pair the phone with activation on a Silver Unlimited Plan or higher. This tier costs $45 per month. Offer valid through 01/10/27 while supplies last online.
Mariyan, a tech enthusiast with a background in Nuclear Physics and Journalism, brings a unique perspective to PhoneArena. His childhood curiosity for gadgets evolved into a professional passion for technology, leading him to the role of Editor-in-Chief at PCWorld Bulgaria before joining PhoneArena. Mariyan's interests range from mainstream Android and iPhone debates to fringe technologies like graphene batteries and nanotechnology. Off-duty, he enjoys playing his electric guitar, practicing Japanese, and revisiting his love for video games and Haruki Murakami's works.
A discussion is a place, where people can voice their opinion, no matter if it
is positive, neutral or negative. However, when posting, one must stay true to the topic, and not just share some
random thoughts, which are not directly related to the matter.
Things that are NOT allowed:
Off-topic talk - you must stick to the subject of discussion
Offensive, hate speech - if you want to say something, say it politely
Spam/Advertisements - these posts are deleted
Multiple accounts - one person can have only one account
Impersonations and offensive nicknames - these accounts get banned
To help keep our community safe and free from spam, we apply temporary limits to newly created accounts:
New accounts created within the last 24 hours may experience restrictions on how frequently they can
post or comment.
These limits are in place as a precaution and will automatically lift.
Moderation is done by humans. We try to be as objective as possible and moderate with zero bias. If you think a
post should be moderated - please, report it.
Have a question about the rules or why you have been moderated/limited/banned? Please,
contact us.
Things that are NOT allowed:
To help keep our community safe and free from spam, we apply temporary limits to newly created accounts: