TrendForce Warns Smartphone Production to Face Headwinds from Q2 2026
According to TrendForce, brands continue to prioritize securing stable memory supplies to avoid further cost escalation or potential supply disruptions, even as some companies scale back their overall annual production targets.
Rising component costs are beginning to weigh heavily on the global smartphone market, with higher prices on new models expected to create clear production headwinds from the second quarter of 2026, according to the latest smartphone research from TrendForce.
TrendForce notes that since the second half of 2025, the handset industry has faced mounting pressure from tightening memory supply and sharply increasing memory prices. These cost pressures have filtered through to end products, forcing manufacturers to raise retail prices and dampening consumer demand in an already cautious market environment.
While major smartphone brands have largely maintained their production plans for the first quarter of 2026, TrendForce expects the impact of higher prices on newly launched models—introduced to absorb rising costs—to become more pronounced from the second quarter. This shift is likely to negatively affect production performance as consumers react to more expensive devices.
Despite growing uncertainty, smartphone makers have so far kept their memory procurement strategies unchanged. According to TrendForce, brands continue to prioritize securing stable memory supplies to avoid further cost escalation or potential supply disruptions, even as some companies scale back their overall annual production targets.
The research firm also points to aggressive manufacturing and shipment activity toward the end of 2025, combined with the fading impact of China’s subsidy programs and weaker-than-expected demand for higher-priced new models. These factors have led to a buildup of finished smartphone inventory at several leading brands. If sell-through at the retail level fails to improve, some manufacturers could begin cutting future production plans as early as the end of the first quarter of 2026.
The first half of 2026 is expected to be a critical adjustment period for smartphone brands as they reassess output levels and refine their product portfolios. Companies will look to mitigate earlier cost increases by revising device specifications and fine-tuning pricing strategies. However, TrendForce cautions that production schedules will not adjust immediately, as existing inventories and the time needed to reconfigure production lines are likely to delay significant changes until between the second and third quarters of the year.
In light of these challenges, TrendForce has revised downward its forecast for global smartphone production in 2026. The firm now expects a year-on-year decline of 7%, up from its previous estimate of a 2% drop made in November 2025. Future revisions will depend on the trajectory of memory prices, the extent of price adjustments by smartphone brands, and consumers’ willingness to absorb higher handset costs.
