Rising Memory Chip Prices Pressure Smartphone Screen Quality
Due to surging memory chip prices, smartphone manufacturers are increasingly downgrading screen quality and other components to manage costs, according to UBI Research.
Memory chip price surges are significantly shrinking the cost budget for other smartphone components, forcing manufacturers to consider downgrading screen quality, according to Korean research firm UBI Research. This trend is a strategic response to rising component expenses.
By the latter half of 2026, memory costs are projected to constitute about 40% of a smartphone's total bill of materials, roughly six times the cost of the display. This is attributed to the combined effect of increasing memory prices and declining shipment prices due to OLED production line depreciation.
To mitigate these costs, some Chinese smartphone makers are reportedly reverting to LTPS OLED panels in certain high-end models, saving several dollars per unit, while top-tier devices continue to use LTPO OLED. Lowering refresh rates is another method to reduce display panel expenses. Mid-range devices are also seeing degradations in chipset platforms and camera specifications.
UBI Research's findings highlight the economic pressures facing the smartphone industry, requiring manufacturers to make difficult trade-offs between component costs, performance, and technological advancement.