Chips Too Costly to Drive Volumes? Goldman Sachs Trims Global Smartphone Shipment Forecasts Through 2027

 

Goldman Sachs has revised down its global smartphone shipment forecasts for 2026 and 2027, warning that persistently high memory silicon pricing will continue to weigh on consumer demand.

Silicon Shortages Crimp Handset Demand

The bank trimmed its global smartphone shipment estimates by 4% for this year and 3% for next year, modeling volumes at 1.14 billion units in 2026 and 1.17 billion units in 2027.

 

This adjust-down implies Goldman now projects a 10% year-over-year drop in volumes for 2026, followed by a 3% expansion in 2027.

 

Its previous baseline had assumed a milder 6% contraction this year and a 2% recovery next year.

 

Further out, Goldman projects 2028 shipments to print at 1.18 billion units, up 1% year-over-year.

 

Goldman attributes the softer outlook directly to rising bill-of-materials (BOM) costs for memory components.

 

Explosive generative AI infrastructure demand has severely constrained global silicon supply, prompting Tier-1 memory chipmakers to aggressively reallocate manufacturing capacity away from legacy consumer electronics nodes and toward high-margin AI hardware.

 

However, while unit volumes are tracking lower, Goldman expects the total market value of the smartphone vertical to expand.

 

The firm projects gross market value to hit $596 billion in 2026, followed by consecutive 2% year-over-year increases to $606 billion in 2027 and $621 billion in 2028.

 

This divergence is anchored by two factors: higher underlying component costs driving up average selling prices (ASPs), and a concerted push by major original equipment manufacturers (OEMs) to transition product portfolios toward the premium segment.

 

Combined, these dynamics are expected to insulate top-line revenue growth for handset manufacturers despite lower absolute volumes.

Constructive Outlook on Premium and Foldable Verticals Retained

On a corporate level, Goldman expects Apple to maintain its global volume leadership, forecasting 246 million iPhone shipments in 2026, followed by Samsung at 235 million units.

 

The bank also remains structural bulls on the foldable smartphone category, especially ahead of Apple's highly anticipated debut of its first foldable device later this year.

 

Additionally, the bank notes that next-generation form factors, including tri-fold architectures, are poised to capture market share in the second half of 2026.

 

While Goldman trimmed its absolute foldable shipment forecasts by 10% for 2026 and 7% for 2027, it still projects structural penetration to scale up incrementally.

 

Foldable market penetration is modeled to hit 3.6% in 2026, 5.9% in 2027, and 6.8% in 2028—translating to 41 million, 69 million, and 80 million units, respectively.

 

Premium tiers continue to offer the most resilient macro profile. Handsets priced above $600 are projected to expand at a 5% compound annual growth rate (CAGR) through 2028, reaching 402 million units.

 

This high-margin segment is forecast to command a 34% market share by 2028, up from 29% in 2025.

 

Conversely, the mid-tier market ($200 to $600) is expected to contract at a 2% annualized rate as consumers adopt a more defensive stance in the absence of major hardware breakthroughs.

 

Finally, Goldman expects modest baseline demand in the entry-level segment (below $200), driven by structural 4G-to-5G migration across developing markets.

 

However, the bank cautioned that this highly price-sensitive cohort remains the most exposed to downside margin pressure from elevated memory input costs.