Global smartphone AP industry, 1Q 2026: Memory price hikes pressure smartphone AP market

DIGITIMES estimates that global smartphone application processor (AP) shipments will decline 15.2% year-on-year in the second quarter of 2026, driven by weakening end-market demand. In the second half of 2025, smartphone brands were able to delay passing rising memory costs onto consumers, thanks to existing inventory and pre-negotiated contract pricing.

However, starting in the fourth quarter of 2025, average prices for LPDDR and NAND flash began to rise, prompting several China-based smartphone brands to raise retail prices in the first quarter of 2026. These price adjustments initially affected mid-to-high-end models before extending to entry-level devices.

Since the beginning of the second quarter of 2026, memory price increases have widened further to 50–80%, severely impacting cost-sensitive Chinese smartphone brands. As a result, DIGITIMES estimates that shipments from China's smartphone vendors will decline 17.8% year-on-year in the same quarter, becoming the primary driver of the overall AP shipment downturn.