Global smartphone shipments have fallen to their lowest level in 14 years, and an SBS News report points to one main suspect: semiconductors have become too expensive. That is the blunt framing of the Korean broadcaster's coverage, which ties the shipment collapse directly to rising chip costs squeezing an already weakened handset market.

A 14-year low means the industry has not shipped this few phones since the period immediately after the global financial crisis. For a market that once grew in double digits almost every year, the figure marks a structural break rather than an ordinary downturn.

Why do expensive chips hit phone makers so hard?

The mechanism is simple. Semiconductors account for a large share of the bill of materials in every smartphone, covering the application processor, memory, image sensors, power management and radio chips. When the price of those components rises, the cost per handset rises with it.

Manufacturers then face a choice. They can pass the cost to consumers through higher prices, or they can absorb it and accept thinner margins. The SBS report's framing — "semiconductors too expensive" — suggests that in the current cycle, price-sensitive buyers have refused to pay more, and shipments have fallen accordingly.

The logic follows a straight line: component costs up, retail prices up, demand down, shipments at a 14-year low.

What does a 14-year low actually tell us?

A drop of this depth removes any doubt that this is a demand problem alone. Smartphone demand has been soft since the pandemic replacement surge faded, but a 14-year trough implies that cost pressure is now doing real damage to volumes, not just to margins.

Korean media attention to the story is itself telling. Korea hosts two of the world's largest memory suppliers and one of its biggest smartphone makers, so a report from Seoul connecting chip prices to weak handset shipments carries weight along the whole supply chain.

The takeaway in plain words: the industry has not shipped so few phones since the late 2000s, and expensive silicon is a central reason.

Who feels the squeeze first?

Handset makers sit in the middle of this pressure. They buy chips from suppliers who raised prices through the shortage years, and they sell phones to consumers who have cut back on discretionary spending. Both ends tighten at once.

Mid-range and budget devices suffer most, because their buyers are the most price-sensitive and their margins are the thinnest. Flagship phones can absorb component costs more easily, but they represent a smaller slice of total shipments.

Component suppliers face the delayed version of the same problem. If phone makers ship fewer units, they order fewer chips, and the price increases that once lifted supplier revenue begin to suppress the volume beneath it.

What comes next?

The SBS report does not forecast a recovery, and the current picture gives little grounds for one. Until semiconductor input costs ease and consumer prices follow, shipment volumes are more likely to stay near this 14-year floor than to rebound quickly — which keeps the commercial balance of power tilted, for now, toward whoever controls the cheapest silicon.