DIGITAL LIFE

Your next budget phone may come with recycled RAM as memory prices climb

Rising memory costs could bring an unexpected change to smartphone manufacturing: more devices may ship with refurbished RAM. While reballed chips can help manufacturers keep costs down, inconsistent quality could affect reliability and shorten smartphone lifespans.

Smartphone makers are increasingly turning to refurbished memory chips to keep production costs under control as DRAM prices continue to rise, just like we reported last month. So far, these components have mainly been used in entry-level and budget phones, but their adoption is expected to grow further in 2027.

Reballed memory is essentially recycled DRAM: chips recovered from older devices are reprocessed and fitted with new solder balls so they can be used again. Most of the current supply consists of 4 GB LPDDR4X modules, which are mainly used in 4G smartphones priced below $200.

Reusing recovered memory chips gives manufacturers a way to cut component costs and keep their devices affordable despite rising DRAM prices. This is particularly important in the budget segment, where even a small price increase can make a significant difference. According to research firm TrendForce, reballed memory is expected to account for 3–4 % of the smartphone market in 2026. That share could rise to 7–9 % next year.

TrendForce expects DRAM price increases to accelerate further in the first quarter of 2027, adding pressure to smartphone makers’ cost structures. As a result, the use of lower-specification components and reballed memory could gradually extend beyond budget models into higher price segments. TrendForce sees this as a potential cost-management strategy as brands adapt to a prolonged period of elevated memory prices.

Still, reballed memory is unlikely to make a major difference to the overall DRAM market. Even with wider adoption in smartphones, these chips are expected to account for only a small share of total annual LPDRAM bit consumption.

Reballed memory can provide short-term savings and help manufacturers maintain shipment volumes amid rising component costs. However, there are risks for both manufacturers and consumers. TrendForce notes that sourcing refurbished chips is more complicated and their quality can be less consistent. This could affect smartphone reliability and shorten device lifespans, while increasing warranty and repair costs for manufacturers and potentially damaging their reputations.

The cost of lots of the devices we all use could be forced up in 2026 because the price of Ram - once one of the cheapest computer components - has more than doubled since October 2025.

The tech powers everything from smartphones to smart TVs, as well as things like medical devices.

Its price has shot up because of the explosive growth in the data centres which power AI, which need Ram too.

That's caused an imbalance between supply and demand which means everyone has to pay more.

Manufacturers often choose to swallow small cost increases, but big ones tend to get passed on to consumers. And these increases are anything but small.

"We are being quoted costs around 500% higher than they were only a couple of months ago," said Steve Mason, general manager of CyberPowerPC, which builds computers.

He said there "will come a point" where these increased component costs will "force" manufacturers to "make decisions about pricing".

"If it uses memory, or storage, there is the potential for price increases," he said.

"The manufacturers will have choices to make, as will consumers."

Ram - or random access memory - is used to store code while you use a device. It is a critical component of almost every kind of computer.

Without it would be impossible for you to read this article, for example.

And with the component being so ubiquitous, Danny Williams from rival computer building site PCSpecialist said he expected price increases to continue "well into 2026".

"The market has been very buoyant in 2025 and if memory prices do not fall back a little I would expect a reduction in consumer demand in 2026," he said.

He said he'd seen "a varied impact" across different Ram producers.

"Some vendors have larger inventories and therefore their price increases are more subtle at perhaps 1.5x to 2x," he said.

But he said other firms did not have a large amount of stock - and they had increased prices by "up to 5x" more.

"Most of the market intelligence we have received would suggest pricing and supply will be a challenge worldwide throughout 2026 into 2027," Mr Mason said.

And some big firms have turned their nose up at the consumer market altogether.

Micron, previously one of the biggest sellers of Ram, announced in December it would stop selling its Crucial brand to focus on AI demand.

"It removes one of the biggest players from the market," Mr Mason said.

"On the one hand, that's less choice for consumers - on the other hand, if their entire production ploughs into AI, it should free up capacity for the others to make more for consumers, so it may balance out."

Mr Howard said a typical laptop, with 16GB of Ram, could see its manufacturing cost increase by $40 to $50 (£30 to £37) in 2026 - and this "will likely be passed on to consumers".

"Smartphones will also see upwards pressure on their prices," he said.

"A typical smartphone could see its cost to build increase $30 which, again, will likely get passed on directly to consumer."

And Mr Williams said there might be another outcome of increased prices too.

Profit margins for entry-level mobile phones are shrinking due to a sharp rise in the cost of hardware components—specifically DRAM memory chips and NAND storage. To keep prices low, manufacturers are considering the use of recycled or refurbished RAM chips in future budget-friendly models.

As memory costs surge due to massive global demand from AI data centers, smartphone makers are turning to reballed and recycled RAM to keep entry-level devices affordable.

Why recycled RAM is emerging:

• AI demand squeezes supply: Massive investments in artificial intelligence data centers have driven up DRAM and NAND memory prices significantly, leading suppliers like Micron and Samsung to reallocate output.

• Soaring production costs: Memory can account for up to 60% of the total bill of materials for low-cost and mid-range smartphones, forcing brands to seek alternative cost-cutting methods.

• Market share of reballed chips: According to market research firm TrendForce via SammyFans, reprocessed or reballed memory is expected to account for 3% to 4% of the smartphone market in 2026, and that share could double to 7% to 9% by 2027.

• Focus on budget 4G models: Most reprocessed chips (such as 4GB LPDDR4X) are primarily targeted at affordable 4G handsets priced under local thresholds like 1,299 yuan.

Risks and trade-offs:

• Reduced reliability: Reclaimed chips are often harvested from decommissioned or 5-to-6-year-old devices, meaning prolonged wear can increase the likelihood of system errors or sudden crashes.

• Higher support costs: Inconsistent quality from refurbished parts can drive up repair rates and warranty claims for manufacturers.

• Potential expansion: If the chip crunch persists, analysts warn that lower-specification or recycled components may gradually stretch into more expensive, higher-tier phone segments

📉 Why is this happening? The smartphone industry is facing a "perfect storm" of rising costs:

• More expensive chips: The cost of critical components, such as RAM and storage, has increased significantly over the last few quarters.

• Budget pressure: Entry-level phones have very slim profit margins. Passing the full cost increase on to the consumer would push these devices out of the "affordable" category.

• The circular alternative: Utilizing RAM chips recovered from older devices—subjected to rigorous quality testing and refurbishment—emerges as a viable, sustainable way to cut manufacturing costs.

🛠️ What does this mean for the consumer? If this trend takes hold, the entry-level smartphone market is likely to adapt in the following ways:

• Controlled pricing: Recycling chips will help prevent the most affordable phones from becoming out of reach.

• Performance guarantees: Recycled components must undergo strict industry screening to ensure they deliver the speed and durability expected of a new device.

• Eco-friendly appeal: Brands are likely to promote this shift as a "green" circular economy initiative, helping to reduce electronic waste.

by mundophone