Memory chips for making phones have become about 350% more expensive in a year. Global smartphone sales for a single quarter have fallen 22% along with them.
On October 15, IDC released preliminary third-quarter data. Global smartphone shipments shrank 22% year over year to 255.3 million units, the biggest quarterly decline since records began.
The cause isn’t within the phone industry itself. The cost of memory chips is up about 350% from last year, and still climbing. AI data centers are buying up supplies, snapping up memory and flash storage at high prices, while phone makers are pushed to the back of the line.
The effects have filtered down. Phones are getting more expensive, and many people are using their old devices for another year. IDC says shipments from all of the top five brands fell year over year, with OPPO and vivo both down by more than 30%.
Samsung and Apple, by contrast, gained market share: 22.6% and 22.4%, respectively. Last year, both were still in the 18% to 19% range.
Chinese brands are in the toughest position. They have lots of low-end models, and demand is weak. IDC puts it bluntly: they can only choose between protecting margins and protecting shipments. Neither option is easy.
Reading this report took me back to 2021. That year, miners bought up all the graphics cards. Gamers couldn’t get cards from official websites, secondhand prices doubled or tripled, and NVIDIA even added mining limits to new cards. It still didn’t help.
With the same batch of wafers, whoever bids more gets them. Back then, the buyers were miners, and the losers were ordinary people looking to upgrade their graphics cards. The shortage dragged on until Ethereum gave up mining in 2022, and only then did things gradually ease.
This year, the leading actors have changed. The buyers are now a few big AI companies, and the product has shifted from graphics cards to memory. This time, memory is in the spotlight. Wafer-fab capacity hasn’t increased; the prices on the orders have changed. When IDC says the market has not yet bottomed out, that’s what it means: this isn’t over yet.
My take is that the money going into AI is being pulled from elsewhere. It didn’t appear out of thin air.
You can see this even more clearly in the crypto market. Two weeks ago, miners resold power they had already contracted to AI data centers, signing contracts for 4 gigawatts, of which only 550 megawatts are actually being billed. Computing power flows to whoever bids the most; miners make way, and phone makers end up even further back in line.
For crypto, this cuts both ways. The most expensive tokens are all sold on the premise that computing power is scarce; decentralized computing and rendering networks are built around that idea. But if AI capital spending comes under question, they’ll fall along with US-listed AI stocks. Bitcoin briefly dropped below $80,000 today, dragged down by a selloff in US AI stocks.
I’m not sure how long this scramble for capacity will last. IDC says the quarter-over-quarter increase in memory chip prices has already fallen from a high of 50% to 100% to the double digits. The same report also says the market won’t recover until at least 2028. Put those two statements together, and I can’t tell which one will prove true first.
IDC itself wrote that an industry’s cost structure has been permanently changed. What it really means is that the category of cheap phones may never come back.
$BTC $TAO $RNDR #币安广场 #手机出货 #存储芯片 #AI算力 #Mining
On October 15, IDC released preliminary third-quarter data. Global smartphone shipments shrank 22% year over year to 255.3 million units, the biggest quarterly decline since records began.
The cause isn’t within the phone industry itself. The cost of memory chips is up about 350% from last year, and still climbing. AI data centers are buying up supplies, snapping up memory and flash storage at high prices, while phone makers are pushed to the back of the line.
The effects have filtered down. Phones are getting more expensive, and many people are using their old devices for another year. IDC says shipments from all of the top five brands fell year over year, with OPPO and vivo both down by more than 30%.
Samsung and Apple, by contrast, gained market share: 22.6% and 22.4%, respectively. Last year, both were still in the 18% to 19% range.
Chinese brands are in the toughest position. They have lots of low-end models, and demand is weak. IDC puts it bluntly: they can only choose between protecting margins and protecting shipments. Neither option is easy.
Reading this report took me back to 2021. That year, miners bought up all the graphics cards. Gamers couldn’t get cards from official websites, secondhand prices doubled or tripled, and NVIDIA even added mining limits to new cards. It still didn’t help.
With the same batch of wafers, whoever bids more gets them. Back then, the buyers were miners, and the losers were ordinary people looking to upgrade their graphics cards. The shortage dragged on until Ethereum gave up mining in 2022, and only then did things gradually ease.
This year, the leading actors have changed. The buyers are now a few big AI companies, and the product has shifted from graphics cards to memory. This time, memory is in the spotlight. Wafer-fab capacity hasn’t increased; the prices on the orders have changed. When IDC says the market has not yet bottomed out, that’s what it means: this isn’t over yet.
My take is that the money going into AI is being pulled from elsewhere. It didn’t appear out of thin air.
You can see this even more clearly in the crypto market. Two weeks ago, miners resold power they had already contracted to AI data centers, signing contracts for 4 gigawatts, of which only 550 megawatts are actually being billed. Computing power flows to whoever bids the most; miners make way, and phone makers end up even further back in line.
For crypto, this cuts both ways. The most expensive tokens are all sold on the premise that computing power is scarce; decentralized computing and rendering networks are built around that idea. But if AI capital spending comes under question, they’ll fall along with US-listed AI stocks. Bitcoin briefly dropped below $80,000 today, dragged down by a selloff in US AI stocks.
I’m not sure how long this scramble for capacity will last. IDC says the quarter-over-quarter increase in memory chip prices has already fallen from a high of 50% to 100% to the double digits. The same report also says the market won’t recover until at least 2028. Put those two statements together, and I can’t tell which one will prove true first.
IDC itself wrote that an industry’s cost structure has been permanently changed. What it really means is that the category of cheap phones may never come back.
$BTC $TAO $RNDR #币安广场 #手机出货 #存储芯片 #AI算力 #Mining