source: techcrunch ai: ai-driven memory crunch jolts india’s smartphone market
level: business
smartphone shipments in india fell 10% year-over-year in the april-june quarter, the steepest june-quarter decline in six years, according to counterpoint research. the drop is linked to higher memory chip costs, as manufacturers like samsung, sk hynix, and micron shift production to high-bandwidth memory for ai accelerators, which is more profitable than standard memory used in phones. this has left less capacity and driven up prices for consumer electronics.
india's market is hit harder than china's, where shipments fell only 2%, because about 60% of indian smartphones are in the sub-₹20,000 (under $210) segment, where price sensitivity is high. shipments in the sub-₹15,000 segment plunged 45%. consumers are delaying upgrades, stretching replacement cycles from 3.5 to 4 years, while premium brands like samsung and apple are less affected. samsung was the only major brand to grow shipments in q2, up 2%, while apple's shipments fell 3% due to supply constraints.
the crunch is reshaping strategies. oneplus said it will stop launching new products in europe and north america, focusing on india and china where it can turn a profit. analysts expect memory shortages and elevated prices to persist until at least end of 2027, with financing becoming key for affordability. brands are building inventory ahead of festive seasons to lock in lower costs, but the market is shifting from volume-led growth to value growth as lower-priced phones become uneconomical.
why it matters: ai-driven memory demand is directly affecting consumer electronics pricing and availability, showing how ai infrastructure needs can disrupt global supply chains and markets.
source: techcrunch ai: ai-driven memory crunch jolts india’s smartphone market