The global memory shortage is now reaching the cheapest phones. Reports from China say some phone makers are turning to memory chips recovered from discarded devices, as AI servers soak up supply of new DRAM.
The claim is spreading on social media, but the underlying reports are unconfirmed. Here is what TrendForce actually says.
Related: Memory Shortage coverage on TechnoSports.
Key Details at a Glance
| Item | What is reported |
|---|---|
| Where chips come from | Discarded phones, via traders in Shenzhen’s Huaqiangbei market |
| Extra cost per unit | Up to RMB 500 for some chips |
| Rumoured subsidy | About RMB 300 per unit from Shenzhen’s local government |
| Likely users | Ultra-low-cost, unbranded phones |
| Official confirmation | None from authorities or companies |
Why the shortage is so bad
TrendForce says AI server demand continues to squeeze DRAM supply, with shortages and price increases expected to last into 2027. Memory makers are prioritising server DRAM and high-bandwidth memory, which leaves less capacity for mobile memory.
As a result, entry-level makers may turn to salvaged or lower-spec components to stay viable, according to the report. Some brands are reportedly cutting production and sales volumes to limit losses because they cannot fully pass the higher costs on to buyers.
What the reports actually claim
The salvaged-chip claim was first reported by TechNews on 16 October 2026 and is unconfirmed. Brands are not named as using such chips, and TechNews says they are largely limited to ultra-low-cost phones and unlikely to enter flagship supply chains.
An April investigation by Caijing described recyclers buying discarded phones, extracting chips from motherboards, then cleaning, refurbishing and repackaging them for resale. One Shandong recycler reportedly dismantled more than 600 of about 1,000 phones bought in March. Analysts warned of yield losses and compatibility risks.
What it means for Indian buyers
Major brands selling in India have not been named in any of these reports. Still, memory costs are pushing up phone prices and squeezing budget models. Our readers should buy from authorised sellers, check warranty terms, and compare memory specifications carefully before buying a very cheap phone.
See our coverage of the memory shortage and read the background on DRAM.
Outlook
TrendForce projects 2026 global smartphone production to fall 14% year over year to about 1.07 billion units, and warns that rising memory costs could further pressure the market in 2027. Until supply improves, expect fewer low-end models and higher prices.
What Is Not Confirmed
- Use of salvaged chips by any named brand is not confirmed.
- The RMB 500 price rise and the RMB 300 subsidy are unconfirmed reports.
- Claims about chips reused for 5-6 years circulating on social media were attributed to Counterpoint, but we could not find that in the reports we reviewed.
Quick Answers
Are major brands using recycled memory?
No brand has been named or confirmed.
Why is memory short?
AI server demand is absorbing DRAM supply.
Will it last?
TrendForce expects shortages to persist into 2027.
Source: TrendForce, Notebookcheck.
