Memory Chip Costs Weigh on Smartphone Demand

In a recent analysis, Goldman Sachs has revised its outlook for the global smartphone market, pointing to persistently high memory chip prices as a key factor dampening consumer demand. This has led the investment bank to lower its shipment forecasts for the coming years.

Shipment Forecasts Trimmed, Growth Trajectory Flattens

Goldman Sachs now expects global smartphone shipments to reach 1.14 billion units in 2026, a 4% cut from its previous forecast. For 2027, the forecast was lowered by 3% to 1.17 billion units. This implies a year-on-year decline of approximately 10% in 2026, followed by a modest 3% recovery in 2027. The firm also introduced its first forecast for 2028, projecting shipments of 1.18 billion units, representing a mere 1% growth, signaling a transition to a period of markedly slower expansion.

Premiumization Offsets Volume Decline, Revenue Set to Rise

Despite the more cautious volume outlook, Goldman Sachs maintains a relatively positive view on market value. The report forecasts the global smartphone market will grow 3% to $596 billion in 2026. Further growth of 2% is expected in both 2027 and 2028, reaching $606 billion and $621 billion respectively. This seemingly contradictory outlook is explained by a significant shift in product mix.

The primary engine for sustained market value growth, according to the report, is the accelerating trend toward premiumization. Key manifestations include:

  • Rising Share of Premium Models: Smartphones priced above $600 are capturing a growing portion of the market.
  • Higher Average Selling Prices (ASP): Although fewer units are being shipped, the increased mix of premium devices boosts the overall ASP, supporting total revenue.
  • Cost Pressure Influences Strategy: High costs for components like memory chips are pushing manufacturers to focus more resources on higher-margin premium segments.

In essence, Goldman Sachs paints a picture of a market at a crossroads. Component cost pressures are suppressing overall demand and unit growth. However, a simultaneous and deep-seated shift toward premium devices is creating a crucial counterbalance, enabling the industry to maintain revenue growth despite softer volume. The market's focus is evolving from pursuing sheer volume to emphasizing quality and value.