Google’s aggressive push into artificial intelligence is reshaping the global consumer electronics market, as soaring memory chip prices force smartphone, PC and gaming device makers to rethink pricing and sales expectations for the year ahead.
Companies such as Google, OpenAI and Microsoft have significantly increased spending on AI data centers, absorbing a large share of the world’s memory chip supply. This has pushed prices sharply higher as manufacturers prioritise more profitable enterprise demand over consumer devices. Leading chip producers Samsung, SK Hynix and Micron have reported strong quarterly earnings in recent months, but they have also warned that supply is struggling to keep pace with demand due to the sustained surge in prices.
The ripple effects are now visible across consumer markets. Research firms IDC and Counterpoint expect global smartphone shipments to fall by at least 2% this year, reversing earlier growth forecasts and marking the first annual decline since 2023. The personal computer market is projected to shrink by at least 4.9% in 2026 after expanding 8.1% last year. Gaming console sales are also expected to decline 4.4% this year after growing 5.8% in 2025, according to TrendForce.
Manufacturers are facing tough decisions as higher component costs squeeze margins. While some brands have already raised prices, larger companies such as Apple and Dell must choose between absorbing costs or passing them on to consumers. “Manufacturers might absorb some costs but given the scale of the shortage, it is certainly going to show up as higher prices for consumers,” said Emarketer analyst Jacob Bourne. Counterpoint estimates memory prices could rise 40% to 50% in the first quarter after a 50% increase last year. Tobey Gonnerman of Fusion Worldwide said, “Over the last two quarters, we’ve seen 1,000% price inflation in some products and pricing is continuing to rise.”
The impact of higher memory costs is expected to fall most heavily on low and mid range device makers such as Xiaomi, TCL Technology and Lenovo, as demand weakens amid rising prices driven by AI investments from companies including Google. TrendForce said Dell and Lenovo were planning price increases of up to 20% in early 2026. Market sentiment has already reflected these pressures, with shares of Raspberry Pi, Xiaomi, Dell, HP Inc and Lenovo declining over the last 3 months of 2025, led by a 27.2% fall in Xiaomi. Some analysts believe Apple is better positioned to absorb the shock. “Apple is better-positioned, as it uses contract pricing (rather than more volatile spot pricing) for its purchases, securing better prices,” said Morningstar analyst William Kerwin, while noting the company may still need to raise prices.
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