The price of cheap smartphones is going to increase soon! Know the reason which will affect your pocket!

A big reason for this is that now chip manufacturing companies are changing the focus of their production. Instead of memory used in smartphones, they are focusing more on making high-bandwidth memory (HBM) required for high-performance computers and AI data centers. As the demand for AI servers and data centers is increasing, the need for HBM is also increasing.

Due to this increasing demand, smartphone companies have started advance purchasing of chips so that the shortage of supply can be avoided. But by doing this, the balance of demand and supply in the market has worsened due to which the prices of memory chips like LPDDR4X are expected to increase by more than 10% in this quarter.

According to Counterpoint Research analyst Parv Sharma, this entire change is happening due to the increasing needs of AI servers. Chip manufacturers are now showing more interest in making HBM as it is giving them higher profits and better returns compared to smartphone parts.

Not only this, the prices of NAND flash storage used in smartphone manufacturing has also started increasing. According to TrendForce, it is possible that their prices may increase by 5 to 10% in this quarter.

In such a situation, experts believe that in the coming months, smartphone companies will have only two options, either they will cut the features of their devices or they will pass the burden of increased costs directly on the consumers. This means that cheap smartphones may no longer be as cheap as before.