Ed Ludlow

It's the prices of the memory, right?

And why we keep saying, I mean, the prices of the memory that has shot up up to even 300% from what they were last year, and they're continuing to go higher.

Memory that used to contribute to about 20% of the smartphone bomb cost is now,

Anywhere, you know, tripling that.

So imagine a smartphone that is below $100.

If the memory cost used to be $15, $20, and that's tripled, it's essentially making below $100, $150 smartphones uneconomical to make anymore.

So those OEMs, and there are a lot of, you know, Android OEMs operating in that space.

with majority of their portfolio, some with 90% of the portfolio below that, those are the ones that are at extreme risk.

Not to say that anyone is immune, even the larger players like Apple and Samsung are going to face higher memory prices, but at least they are able to secure the supply.

And when they get the supply, or at least majority of it, they can afford those higher prices, right?

Because their devices have larger margins.

It's really those lower-end Android players

that are already operating on razor-thin margins that are simply not going to be able to make those phones, those below $150 phones.

You know, I would, and I think I said that earlier to someone that we are, you know, this is going to be a time of like survival of the fittest where the, of course, the larger players are going to be able to secure their supply and leverage their, you know, their margins to be able to absorb some of the costs.

But we're, you know, we always see, right, at times of crisis is when the biggest innovations come out, right?

So,

You know, we're curious to see and we've already hearing of some of the lower OEMs either resorting to use devices to get the RAM from that or, you know, and memory from older phones.

But, you know, we still don't think it'll be enough to avert the drop that we're seeing.

The other strategy and mitigation strategy that they're thinking about or going to leverage is that they're going to try to move up in price segments.

Right.