Rising Chip Costs Threaten to Block Billions from AI Access
A surge in component prices for mobile devices is widening the digital divide, leaving hundreds of millions of people unable to afford basic internet connectivity.
The promise of artificial intelligence to improve daily life remains out of reach for a significant portion of the global population. The primary barrier is not a lack of network coverage, but the escalating cost of the hardware required to connect. As component prices soar, the devices that serve as the gateway to digital services are becoming increasingly unaffordable for people in low- and middle-income regions.
This financial hurdle creates a deepening inequality that threatens to exclude billions from the next wave of technological advancement. While connectivity infrastructure expands, the hardware necessary to utilize it is becoming a luxury good. This shift risks locking out emerging economies from participating in the digital economy altogether, creating a divide based on purchasing power rather than geographic location.
Component costs drive smartphone prices up
The core issue stems from a dramatic increase in the cost of memory and chipsets. According to reports cited by GN technics/mobile (en-US), prices for these essential parts more than doubled between late 2025 and early 2026. A further steep increase followed in the second quarter of 2026. These spikes are driven by global demand for AI infrastructure and data centers, which compete with consumer electronics for the same limited supply of high-performance components.
Manufacturers pass these rising production costs directly to consumers. As a result, entry-level smartphones, which are the primary means of internet access for many developing nations, are seeing their price tags climb. This trend threatens to reverse years of progress in making mobile technology accessible. The financial impact is most severe in sub-Saharan Africa, where the cost of a basic smartphone can consume a large portion of a household’s monthly income.
A widening usage gap emerges
The consequences of these price hikes are already visible in global connectivity statistics. While nearly five billion people currently use mobile internet on their own devices, 3.4 billion remain offline. Crucially, 90 percent of these disconnected individuals live within the range of mobile broadband networks. This indicates that the barrier is not physical access to a signal, but the inability to afford the device that captures it.
Growth in the global digital population is also slowing. The number of new users coming online has decreased year over year, signaling that the pool of affordable devices is shrinking. Industry leaders warn that this trend could lead to the largest annual decline in smartphone shipments on record. Emerging markets are particularly vulnerable, as their economies rely heavily on mobile connectivity for commerce, education, and communication.
Calls for affordable device standards
To counteract this trend, industry bodies are urging manufacturers to prioritize affordability. A specific target has been proposed to reduce the price of entry-level smartphones to thirty dollars. At this price point, devices would become accessible to approximately 1.6 billion people. Lowering the cost further to twenty dollars could expand access to 2.2 billion individuals living within covered areas.
However, achieving these price targets requires action from the entire supply chain. Chipset and memory producers must ensure a stable supply of affordable components for entry-level handsets. Without this cooperation, the demand for high-end AI hardware will continue to drive up costs, leaving the most affordable devices out of reach for those who need them most.
