MBSB Research announced on Thursday that it is maintaining a neutral outlook on Malaysia’s technology sector, predicting challenges for the smartphone industry in 2026. The research firm expects the market to contract between 0.9% and 2.1% year on year due to a continuing shortage of memory chips, which are vital for devices and could hinder the growth of artificial intelligence (AI).
Despite the ongoing memory chip crisis, global smartphone shipments increased by 2.3% to 336.3 million units, driven by demand for premium products and the popularity of foldable phones. Many consumers are also rushing to buy before anticipated price increases.
Leading memory chip producers such as SK Hynix, Samsung Electronics, and Micron Technology are shifting focus from the consumer market to meet the rising demand for AI chips. Micron, in particular, plans to stop selling consumer memory by February 2026. Likewise, SK Hynix has already sold out its entire 2026 production capacity for high-bandwidth memory, DRAM, and NAND.
MBSB indicated that the low-end smartphone segment will likely be most affected. Rising memory costs may increase smartphone prices, making the low-price strategy less viable. However, flagship models, such as those from Apple, may remain resilient due to strong supply chains and high profit margins.
To counteract these issues, companies may need to consider lowering specifications, streamlining their product lines, and encouraging upgrades, while also securing advanced orders for essential components.
Vocabulary List:
- Contract /kənˈtrækt/ (verb): To decrease in size number or range.
- Shortage /ˈʃɔːrtɪdʒ/ (noun): A state in which there is not enough of something.
- Resilient /rɪˈzɪl.jənt/ (adjective): Able to recover quickly from difficulties; tough.
- Viable /ˈvaɪ.ə.bəl/ (adjective): Capable of working successfully; feasible.
- Segmentation /ˌsɛɡmɛnˈteɪʃən/ (noun): The process of dividing something into parts or sections.
- Streamlining /ˈstriːm.laɪn/ (verb): To make (an organization or system) more efficient and effective by employing faster or simpler working methods.
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