January 27, 2026 – A “super cycle” in memory chip prices is sending shockwaves through the semiconductor industry, with IT equipment and consumer electronics manufacturers experiencing a sharp slowdown in end-user demand, South Korean outlet Chosun Biz reported today.
Fabless giants like Qualcomm and MediaTek, key suppliers for smartphone components, now face significant downward revisions to their financial outlooks. MediaTek, whose smartphone application processors (APs) account for 53% of total revenue, is particularly vulnerable, as APs represent one of the highest-cost elements in a phone’s bill of materials (BOM). Declining smartphone shipments are expected to directly erode its core profits.
Display driver IC (DDI) manufacturers are also struggling. LX Semicon is shifting focus to IT-grade OLED displays to offset weakening demand for mobile DDIs, while Novatek faces mounting pressure from sluggish market conditions.
The foundry sector is not immune. Legacy chip nodes, commonly used in older devices, are the first to undergo inventory corrections as end demand weakens, according to Reuters. DB Hitek, heavily reliant on 8-inch wafers for TV DDIs and power management ICs (PMICs), is grappling with both falling orders and price compression.
Even the relatively insulated automotive electronics market is feeling the strain. TrendForce reports that automakers are redesigning components to cope with persistent memory shortages and rising costs, with some forced to alter supply chain strategies due to prolonged scarcity.
Major European semiconductor firms are responding aggressively. Infineon has launched a cost-cutting initiative citing “softening end demand,” while NXP warned that automakers may reduce orders. Renesas Electronics of Japan announced layoffs amid slowing demand across multiple sectors.
Memory price hikes remain relentless. TrendForce projects that general-purpose DRAM prices will surge 55–60% quarter-over-quarter in Q1 2026, with NAND Flash rising 33–38%.
Compal Electronics, a leading PC manufacturer, cautioned that the “memory crisis” could persist into next year, dramatically reshaping cost structures. Memory components, currently 15–18% of total PC expenses, may soar to 35–40%, creating immense pressure to pass costs downstream across the hardware ecosystem.
