Memory to continue to weigh in on Smartphones in 2027

UBS believes memory will continue to weigh on smartphones in 2027. Following the 3Q26 APAC Tech Tour, we see further downside for Android ex-Samsung smartphone unit builds into 2027, with relative resilience for Apple and Samsung, as memory makers keep prioritising hyperscale and AI customers, making memory supply an even bigger bottleneck next year. We de-risk our '27E smartphone unit Sell-In forecast to 1.11bn (-3% YoY) from 1.16bn (+2% YoY) and roll out initial '28E forecasts at 1.13bn (+2% YoY), leaving '26E unchanged at 1.14bn (-10% YoY). By 4Q26E memory is estimated to account for 35% of flagship/premium smartphone bill-of-material (BOM) costs and 56% of low-end BOM costs (from 13%/29% in 4Q25). Global smartphone Sell-Through is down 8.4% YoY Jul '26 YTD, with Apple (+8.9% YoY) and Samsung (-4.8% YoY) outperforming Chinese Android peers. In the supply chain we prefer MediaTek, Samsung, ASE, Hon Hai, JCET, Micron, Murata, SEMCO, SK Hynix and TSMC;