Niche Electronics Makers Brace for Multi-Year Memory Chip Shortage

Smaller, independent phone and laptop makers are preparing for a prolonged shortage of memory chips, forcing them to redesign products and absorb rising costs. Executives from several niche firms told Reuters they expect the supply crunch to last through 2027, a forecast that threatens to squeeze the lower end of the consumer electronics market.

A Squeeze on Supply

Industry leaders and analysts are signaling a severe, long-term imbalance between memory supply and demand. The CEO of memory maker SK Hynix warned in July that 2027 could be "the worst year in the industry’s history from the supply perspective," with demand potentially outstripping capacity beyond 2030. For smaller device makers, the primary challenge is securing supply at all.

"Availability, not price, is the binding constraint," said Raymond van Eck, chief executive of Dutch repairable-phone maker Fairphone. "If you don’t have allocation, you’re out of the game anyhow." This scarcity is already impacting the broader market, with Counterpoint Research forecasting in June that global smartphone shipments would fall 13.9% this year, the steepest annual decline on record, as high memory costs make entry-level phones uneconomical to produce.

Market Dynamics

The scale of the supply-demand mismatch became apparent late last year, prompting a scramble for inventory that worsened the shortage, according to Nirav Patel, CEO of U.S.-based laptop maker Framework. While the pace of price increases has slowed, costs remain elevated. Research firm TrendForce expects conventional DRAM contract prices to rise 13-18% this quarter, a significant increase though less severe than the 93-98% surge seen in the first quarter.

Ad

Unable to afford large stockpiles, smaller companies like Framework must place non-cancellable orders far in advance without certainty on final pricing or delivery volumes. Sami Pienimäki, CEO of Finnish handset maker Jolla, said he expects supply to begin normalizing only from 2028.

Strategic Adaptations

In response, these companies are embedding scarcity planning into their core operations. Their strategies include:

• Product Redesign: Jolla has engineered two motherboard variants to allow swapping between combined memory packages and discrete chips. Framework designed its laptops with modular, user-replaceable memory from the outset, enabling customers to salvage components from older machines.
• Supply Chain Diligence: Jolla now stress-tests samples from every chip batch it receives to guard against refurbished or fake components entering its supply chain, a risk that Pienimäki notes increases when prices spike.
• Cost Management: Companies are passing on costs differently. Framework reprices its products quickly as component costs fluctuate, while Jolla has introduced paid memory upgrades. Fairphone, where memory can account for nearly 60% of the bill of materials on a $400 handset, has so far managed to avoid raising its prices.