Nothing to raise phone prices in 2026 as AI drives up memory costs: Details

Nothing CEO Carl Pei says sharp rise in memory prices, driven by AI data centres, will force price hikes across Nothing's phone portfolio, with some models also moving to UFS 3.1 storage

UK-based consumer technology company Nothing has confirmed that its upcoming smartphones will cost more, citing a sharp rise in memory prices driven by global demand from artificial intelligence data centres. On X, Nothing CEO Carl Pei said the company will raise prices across its smartphone portfolio in 2026, as rising component costs make it difficult to maintain current pricing without cutting specifications.

 

Pei said RAM and storage have become one of the biggest cost drivers in smartphones after years of steadily getting cheaper. He added that the same memory used in phones is now being locked in by AI companies for data centres, pushing prices up sharply and changing how smartphones are priced.

 

“Pricing will inevitably also increase across our smartphone portfolio,” Pei wrote, adding that some products launching in the first quarter of 2026 will move to faster UFS 3.1 storage, which further adds to costs.

 

While Pei did not name specific models, these products are likely to be new entries in the brand’s mid-range A-series as well as new CMF-branded smartphones. Nothing’s current phones in this segment, such as the Phone (3a) series and CMF Phone 2 Pro, use UFS 2.2 storage. In that context, Pei’s reference to “upgrading” to UFS 3.1 most likely applies to their successors.

How much could prices rise

According to Pei, memory prices have already gone up by as much as three times in some cases, and could rise further as demand continues to outstrip supply. He said memory modules that cost under $20 a year ago could cross $100 by the end of 2026 for high-end models.

 

Pei said brands now face two options: raise prices or reduce hardware specifications. He added that in some cases, prices may need to go up by 30 per cent or more to keep performance levels unchanged.

Why memory costs are rising

Pei said the main reason behind rising smartphone costs is competition with AI infrastructure.

 

The same memory used in phones is now in heavy demand by hyperscalers building AI data centres. These companies book silicon wafer capacity years in advance, reducing supply for consumer electronics. As a result, smartphone brands are now competing directly with AI firms for memory.

This is the first time, Pei said, that smartphones are no longer the main driver of memory demand.

 

Because of this shift, memory is no longer getting cheaper every year. Instead, it is becoming one of the most expensive parts of a phone’s bill of materials.

Will more brands be affected

Pei said this is not a problem unique to Nothing. According to him, rising memory prices will affect the entire smartphone industry.

 

He added that entry-level and mid-range segments could shrink significantly in 2026, as price-sensitive buyers react to higher costs. Some markets could see demand drop by 20 per cent or more, especially where brands have traditionally competed mainly on price.

 

Pei said the long-standing model of “more specs for less money” is no longer sustainable under current conditions.