The report, citing industry sources, revealed that Xiaomi has cut its shipment forecast by between 10 and 70 million units, while Transsion, Africa’s dominant smartphone vendor, has reduced its target by 30 to 45 million units from earlier projections.

The development underscores mounting pressure on smartphone manufacturers as rising memory costs and constrained supply reshape global production strategies.

Memory crunch reshapes global smartphone outlook

The cuts align with broader industry forecasts pointing to a slowdown in the global smartphone market.

Research firm Omdia projects that global smartphone shipments will decline by about 7% in 2026, driven by tightening memory supply and geopolitical pressures.

At the core of the disruption is a structural shift in the semiconductor industry. Major memory producers, including Samsung, SK Hynix and Micron, are increasingly prioritising high-margin chips for artificial intelligence (AI) systems, leaving less capacity for consumer electronics.

This shift has triggered a supply squeeze, pushing up component costs and forcing smartphone vendors to either absorb higher expenses or scale back production.

Africa’s smartphone market faces direct impact

For Africa, the implications are significant. Transsion, which owns brands such as TECNO, Infinix and itel, commands a dominant share of the continent’s smartphone market, particularly in the entry-level and mid-range segments.

These segments are the most vulnerable to rising component costs. According to industry data, lower-priced smartphones, often below $200, are already experiencing margin pressure as memory now accounts for a larger share of total production costs.

As a result, African consumers could face:

• Higher smartphone prices
• Reduced availability of entry-level devices
• Slower upgrade cycles

This aligns with recent trends in Nigeria, where smartphone prices are already projected to rise sharply due to component cost increases and currency pressures.

From supply shortage to availability crisis

While the issue is often described as a chip shortage, analysts argue the challenge is more about allocation and prioritisation than absolute scarcity.

The surge in AI demand, particularly from data centres, has effectively redirected memory supply away from smartphones. Each AI server requires significantly more memory than a mobile device, intensifying competition for limited resources.

This explains why even large manufacturers are struggling to secure adequate supply despite overall semiconductor production capacity remaining relatively stable.

Strategic shift by smartphone makers

In response, smartphone vendors are adjusting strategies across multiple fronts:

• Reducing shipment targets to align with supply realities
• Simplifying product configurations to cut costs
• Focusing on higher-margin models where pricing power is stronger

Premium brands like Apple and Samsung are expected to weather the disruption better due to stronger supply chain relationships and vertical integration.

However, brands heavily reliant on volume-driven, low-cost devices, such as Transsion, face greater exposure.

What this means for Nigeria and beyond

Nigeria, one of Africa’s largest smartphone markets, sits at the intersection of these global shifts. With rising inflation and currency volatility already affecting consumer purchasing power, any further increase in device prices could dampen demand.

At the same time, reduced shipment volumes may slow digital inclusion efforts, particularly in underserved communities where affordable smartphones remain the primary gateway to the internet.

Smartphone Outlook for Africa

While some analysts expect memory supply pressures to ease in the second half of 2026, risks remain. If AI demand continues to absorb semiconductor capacity, the smartphone market could face prolonged constraints.

For Africa, the situation highlights a deeper challenge: dependence on global supply chains for critical digital infrastructure.

As the industry evolves, stakeholders across the continent, from policymakers to telecom operators, may need to rethink strategies around local manufacturing, supply chain resilience, and digital affordability.

The decision by Xiaomi and Transsion to cut 2026 targets is more than a supply chain adjustment, it is a signal that the global tech ecosystem is being reshaped by AI, with Africa’s smartphone market directly in the line of impact.

The company said on Tuesday it is projecting an operating profit of 57.2 trillion won ($38.2 billion) for the January to March period.

This is far ahead of expectations and more than eight times higher than the 6.69 trillion won it reported a year earlier. It also exceeds the company’s total profit for all of last year.

This would be Samsung’s strongest quarterly result on record. Its previous high stood at 20 trillion won, reached in the final quarter of 2025.

Demand from data centres has pushed prices higher. Companies building AI systems buy large volumes of memory chips, stretching supply. As a result, prices for DRAM chips rose sharply in the first quarter, with estimates pointing to increases of more than 50%.

“As customers anticipated further increases, actual contract prices came in higher, leading to the beat,” Kim Sunwoo, a senior analyst at Meritz Securities, said.

Samsung appears to be benefiting across most of its business. Analysts estimate its memory division generated about 54 trillion won in operating profit during the quarter.

Its mobile unit also held up, reporting around 4 trillion won in profit, though slightly lower than a year ago. However, its logic chip business is still under pressure and is expected to post a loss.

Currency movements have also helped. The South Korean won has fallen to a near 17-year low against the U.S. dollar, lifting the value of overseas earnings when converted back.

Even so, there are signs that the pace of growth may slow. The high cost of energy linked to the conflict in the Middle East has added pressure on production. At the same time, there are concerns that customers may begin to push back against high chip prices.

“There are growing concerns about a peak-out in memory price increases. It does appear that we are now past the initial upcycle phase and into a later stage,” said Ryu Young-ho, a senior analyst at NH Investment & Securities.

Recent data support that view. Spot prices for DRAM chips eased last week, noting that buyers are struggling to keep up with current price levels.

New technology could also affect demand. Google recently introduced a memory-saving system known as TurboQuant, which may reduce the amount of memory needed for AI workloads.

Samsung has also been working to strengthen its position in high-bandwidth memory chips, which are used in advanced AI processors.

The company began shipping its latest HBM4 chips to Nvidia in February, narrowing the gap with its main opponent, SK Hynix. Still, these advanced chips account for less than 10% of its DRAM revenue, meaning most of the profit is still coming from standard memory products.

In the market, Samsung’s shares rose 1.8% following the earnings outlook, outperforming the index. Shares in SK Hynix also increased.

Despite recent challenges, Samsung’s stock is still significantly higher this year, building on strong gains recorded in 2025.

The company is expected to release full details of its first-quarter results on April 30.