Why smartphones prices are increasing so much

Most of you have noticed that the prices of smartphones and laptops have been going up. Especially the entry level ones. This is the case wherever you buy your devices from.

As Techzim, we sell smartphones to our community and are seeing this first hand. We retailed the Samsung Galaxy A07 with 128GB storage and 4GB RAM at $110 around March this year. It has been going up gradually and this week that phone is now $160! It’s crazy. It brings back the hyperinflation trauma for most of us.

It’s happening at such a scale globally that people are now referring to this crisis as “RAMmageddon.”

The situation is so bad that RAM has become the most expensive component in a smartphone.

We would like to answer what we can in this article and make recommendations. If you have any questions, please do ask in the comments so we address them.

Why are smartphones prices going up so drastically? What’s going on?

So, there’s a global RAM shortage right now. it actually started at the end of last year. The effects had not reached us but now we are getting hit too.

What’s causing this RAM Shortage?

The crisis hasd been caused by the sudden growth and need for more AI infrascturture. RAM is an important component in the chips needed for AI so companies like Google, Amazon, Meta (Facebook, WhatsApp), Microsoft, Oracle are buying a lot of them for their data centres.
These companies are generally called Hyperscalers.

And there is not even enough for them so the demand is increasing. When demand is high and supply is low, prices increase.

There are just a few companies that make RAM chips globally. These companies supply everyone (phone makers, laptop makers, these Hyperscalers)

Is there profiteering going on as well?

It’s hard to say, but likely. Situations like these create opportunities for some companies to want to profiteer by raising prices above and beyond.

Some manufacturers of these RAM were sued for taking advantage of the supply shortage by price-fixing. taking advantage doesn’t just happen at manufacturer level, even distributors can do this. It is possible they are doing it at global, regional and even local country level.

When will the prices stabilise?

It will take a long time. At least a year from now. Likely more.

The few companies that make RAM have already started expanding so that they can make even more RAM chips, but this process takes years. It’s said it takes at least 2 years to bring up a new RAM factory.

What’s our advice then?

If you’re planning to buy a new phone or laptop (especially entry level ones), don’t assume the price you have seen in a shop will be the same price about a week or month later. The prices may be higher.

If you have some cash and want to buy a phone or laptop, wherever you buy, buy right away and don’t wait.

If you plan to upgrade your laptop with additional RAM, do it right away. Waiting for the prices to stabilise means you will wait a long time.

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