Smartphone AI tax is looming

A significant price shift is looming in South Africa’s smartphone market, and Tecno suggests consumers may want to consider upgrading sooner rather than later. According to the tech company, a global surge in AI is creating an unavoidable “AI tax”, which will increasingly be reflected in the price of consumer devices.

The scale of investment pouring into AI infrastructure is reshaping the broader hardware landscape. Global technology giants, including Nvidia, AMD, Microsoft, Google and Amazon, are spending billions on AI-focused data centres, fuelling extraordinary demand for advanced GPUs, high-bandwidth memory and leading-edge semiconductor manufacturing capacity.

“Giant tech companies overseas are currently snapping up the world’s supply of computer chips and memory parts to build massive AI data centres,” said Tecno in a statement. “This global demand has turned standard smartphone components into premium commodities, driving manufacturing costs to record highs.”

As production capacity is absorbed by AI workloads, core components such as processors and memory modules are becoming more expensive and harder to secure, pushing up manufacturing costs across the mobile industry.

“As global demand for AI-capable parts soars, the cost of making your next smartphone jumps. Industry analysts predict that this AI tax could see the prices of budget-friendly smartphones rise by as much as 20% to 30% in the coming months.”

The ripple effects are already showing up beyond smartphones. In SA’s gaming market, the cost of RAM has climbed by as much as 250% in some cases. That rise is being mirrored by higher GPU prices and growing concern about shortages, as demand from AI data centres and high-performance computing competes with consumer electronics for limited supply. When memory and graphics hardware become harder to secure and more expensive to source, manufacturers face higher production costs across multiple categories, including smartphones.

Tecno goes further, describing the situation as a looming “memory apocalypse”. According to the company, silicon wafers that would traditionally be allocated to smartphone production are being redirected towards large-scale AI infrastructure. These AI systems can require up to three times more manufacturing capacity than a standard smartphone module, effectively pushing mobile devices to the back of the production queue.

Tecno aims to beat the surge

Industry data shows that contract prices for key memory components have increased by more than 75% year on year, which is likely to affect the cost of future devices.

“Instead of waiting until prices go up and you’re left with the bill, Tecno is doing things differently: urging you to upgrade now to secure current-generation pricing before the market shifts.”

To support this, the brand is offering the following prices “to beat the AI tax” until the end of January 2026 (availability varies per retailer, per store, per model, and while stocks last):

*Jason Bannier is a data analyst at World Wide Worx and deputy editor of Gadget.co.za. Follow him on Bluesky at @jas2bann.