Feb 26 (Reuters) - The global smartphone market is poised to suffer its biggest decline ever in 2026, sinking to a more than decade low in shipments, as surging memory chip prices drive up device costs, the International Data Corporation said on Thursday.

Smartphone shipments are expected to drop 12.9% to 1.12 billion units, the research firm said in a report.

The decline will hit low-end Android manufacturers the hardest, while Apple ( AAPL ) and Samsung are positioned to gain market share as smaller rivals struggle or exit the market entirely, the report said.

"What we are witnessing is not a temporary squeeze, but a tsunami-like shock originating in the memory supply chain," said Francisco Jeronimo, vice president for Worldwide Client Devices at IDC.

A rapid build-out of AI infrastructure by tech firms such as Meta, Google and Microsoft has captured much of the memory chips supply, lifting prices as manufacturers prioritize components for higher-margin data centers over consumer devices.

Memory chips, or DRAM, are crucial to smartphones as they allow power-hungry applications to run smoothly.

Analysts have said rising component costs will force budget-device focused companies to pass the expenses on to consumers, just as demand at higher price points is weakening.

Apple ( AAPL ) and Samsung, with stronger balance sheets and premium positioning, are better positioned, IDC said.

It expects the average selling price of smartphones to surge 14% to a record $523 this year, as manufacturers shift toward higher-margin models to offset ballooning costs.

IDC expects a modest 2% recovery in 2027 as the crisis eases, followed by a 5.2% rebound in 2028, though it said that the market was unlikely to return to previous norms.

"The memory crisis will cause more than a temporary decline; it marks a structural reset of the entire market," said Nabila Popal, senior research director at IDC's Mobile Phone Tracker.

She warned that the sub-$100 smartphone segment, representing 171 million devices, will become "permanently uneconomical" even after memory prices stabilize by mid-2027.

(Reporting by Kritika Lamba in Bengaluru; Editing by Shinjini Ganguli)