Increased Memory Chip Demand Due to Advancing Smartphones

Increased Memory Chip Demand Due to Advancing Smartphones

With smartphones becoming faster, more durable, and requiring a greater amount of memory, the demand for memory chips is ever increasing. It is expected that most of the memory products will continue on the path of high demand throughout 2018, reflecting wider trends in the data center and mobile markets. Chipmakers and analysts predict the price rally will continue this year, as the average price of benchmark memory chips rose 26-31% last year.

Although demand for utility smartphones remains strong, there is growing demand in emerging markets for 4G smartphones, showcasing more storage, better processors and more advanced cameras (2). Furthermore, with 5G smartphones on the horizon, phone manufacturers are preparing their current prototypes for the upcoming change. According to Qualcomm’s CEO, 5G ready networks and devices should be commercially available by 2019 (4).

Accompanying this market trend, there is a concern about rising component costs, as well as limited supply, due to the reduced availability of critical components. With the recent release of the iPhone 8 and the upcoming iPhone X, this is creating a worldwide shortage of DRAM and NAND chips, with competitors struggling to secure their own supplies.

Some competitors are placing orders well before they need chips, others are paying premiums to ensure a supply and may even are forced to reduce the specs of their phones if they are unable to source the chips they need (3).

Advanced MP Technology is a trusted name in the distribution of electronic components, focused on mitigating components shortage, such as memory products; and provider of supply chain solutions. With 39+ years in the business, our industry relationships and highly trained global purchasing and procurement teams are able to work around the clock to source products facing shortages.