Smaller phone and laptop makers dig in for years of memory scarcity

Independent phone and laptop manufacturers are grappling with a memory shortage that is expected to persist until 2027. Availability, rather than price, is proving to be the limiting factor in the lower end of the device market, according to executives at three companies. Raymond van Eck, CEO of Dutch repairable-phone maker Fairphone, stated that if a company cannot secure a memory allocation, it will be unable to produce devices.

SK Hynix, a leading memory maker, CEO warned in July that the year 2027 would be the worst in the industry's history from a supply perspective, with demand outpacing capacity beyond 2030.

Counterpoint Research predicted in June that smartphone shipments would decline by 13.9% this year to 1.08 billion units, marking the steepest annual decline in history. This decline is attributed to memory costs making entry-level phones economically unfeasible to manufacture. TrendForce expects conventional volatile memory (DRAM) contract prices to increase by 13-18% this quarter, compared to 93-98% in the previous quarter.

Finnish handset maker Jolla, founded by former Nokia engineers, has experienced a peak in its combined storage and DRAM package as of the end of March, which has remained steady. CEO Sami Pienimäki expressed satisfaction with the current situation, expecting supply to stabilize only from 2028. The scale of the supply gap became apparent late last year, prompting all companies to scramble for available memory as quickly as possible, leading to an even deeper shortage.

Unable to afford stockpiling, Framework, a U.S. repairable-laptop maker, places non-cancellable orders in advance without knowing the final price, timing, or volume. Jolla designed two motherboard variants to accommodate the possibility of swapping out the combined memory package for discrete chips. Framework made memory modular from the outset, allowing customers to incorporate memory salvaged from older devices.

Jolla also implements rigorous stress-testing for each batch of memory received, verifying that the chips are new rather than refurbished parts being resold as new. Memory can account for nearly 60% of the bill of materials on handsets priced around $400, according to van Eck. Each firm handles the increased costs differently: Framework adjusts prices quickly as costs occur, Jolla introduces a paid memory upgrade option, and Fairphone has refrained from raising prices altogether.