RAM prices surge nearly fourfold as TSMC abandons 4nm chip line for Android

MediaTek and Qualcomm are believed to have cut 4nm chip orders at TSMC by a total of 20,000-30,000 wafers per month, which is equivalent to roughly 15-20 million smartphone chips. The reduction is prompting TSMC to reallocate capacity toward the 3nm process within the next 6-12 months.

TSMC shifts part of 4nm capacity to 3nm

TSMC is converting part of its 4nm production line to the more advanced 3nm process as Android smartphone customers repeatedly trim 4nm chip orders. The change reflects weak demand across the global smartphone market.

Converting the line is expected to take about a year. The 4nm line currently mainly supplies chips used in mid-range and budget smartphones, a segment facing the heaviest price pressure.

Order cuts and repurposing constraints

Although around 80-90% of devices produced on 4nm can be repurposed for 3nm, the transition remains complex and time-consuming. TSMC expects the process to take 6-12 months.

Memory price surge pressures budget phones

Both MediaTek and Qualcomm are believed to have significantly reduced 4nm chip orders at TSMC. The estimated total cut of 20,000-30,000 wafers per month corresponds to about 15-20 million smartphone chips.

The underlying cause is the sharp rise in memory prices. LPDDR5 RAM contract prices have increased more than threefold since early 2025 and are currently around $10/GB, with expectations for further growth into double digits by 2027.

Cost impact on low-end devices

The situation is especially acute for budget smartphones, where RAM costs can account for up to 35% of the component cost of a low-end device. NAND storage adds another 19%. Combined, RAM and NAND consume more than half of the total production cost of a cheap smartphone, leaving limited room for brands to maintain competitive pricing.

Industry remarks highlight the scale of increases

Xiaomi chairman Lu Weibing said the memory price increase has surpassed expectations, with the price for the same memory configuration rising nearly fourfold since Q1 last year. He cited that the 12 GB + 512 GB version is priced around 1,500 yuan (about 5.1 million dong), while the 16 GB + 1 TB version has increased to an “unacceptable” level. He added that this reality affects Redmi, a line that has targeted affordable pricing.

Capacity reallocation toward stronger demand

With smartphone customers trimming 4nm orders and memory costs rising, TSMC is expected to restructure capacity and shift toward 3nm production. Demand for 3nm remains stronger from Apple and AI customers, while the broader smartphone market seeks a new balance.