AINEWS
Nothing Cancels Its Budget Phone and Blames AI Data Centers
Specialised memory chips that power AI servers are pushing up prices for the ordinary DRAM inside phones — and Nothing's £219 CMF Phone 3 Pro is the first casualty.
Specialised memory chips that power AI servers are pushing up prices for the ordinary DRAM inside phones — and Nothing's £219 CMF Phone 3 Pro is the first casualty.
Nothing killed its cheapest phone, and the co-founder put the reason on the record. The CMF Phone 3 Pro, a £219 follow-up to last year's well-reviewed CMF Phone 2 Pro, will not be coming to market at all, because "with memory prices where they are right now, we can't build a phone that feels like a genuine step forward at a price that makes sense for CMF," Nothing co-founder Akis Evangelidis wrote on X in mid-2026.
CMF is Nothing's budget sub-brand, set up to put a Nothing-designed phone in the hands of buyers who cannot stretch to the company's flagship handsets. The CMF Phone 2 Pro launched in 2025 at £219, picked up a Best Buy award from Expert Reviews, and was discontinued less than a year later, the first warning sign that the unit economics of a sub-£220 phone had stopped working. With the successor now cancelled outright, the budget end of the Android market has lost both the product and the upgrade path in about a year.
The mechanism behind that pricing pressure is artificial intelligence, working through a specific kind of memory chip. AI data centers run on High-Bandwidth Memory, or HBM, a specialised DRAM stack that sits next to AI accelerators. Samsung, SK Hynix, and Micron are pulling wafer capacity and engineering effort into HBM because that is where the per-bit margin is highest. Consumer phones, laptops, and game consoles still use conventional DRAM, and they now compete for the fab space that is left. Evangelidis's quote, on his X post, names memory pricing as the specific reason a £219 phone stopped being buildable.
The structural picture backs that up. Samsung Electronics, in its official Q4 and FY 2025 results, reported an all-time-high quarterly revenue and operating profit for its Memory business, driven by "expanded sales of HBM and other high-value-added products, as well as the overall market price surge." Samsung's Device Solutions division separately flagged "limited supply availability" and said AI and server demand would keep rising into the first quarter of 2026. A memory supplier saying it cannot make enough chips to meet demand, while posting record profits, is the cleanest summary of what is happening at the top of the supply chain.
How long it lasts is a separate question. SK Group chairman Chey Tae-won said in March 2026, per Reuters and Bloomberg as cited by Expert Reviews, that the global chip wafer shortage is likely to persist until 2030. That is a single named executive's forecast, not an industry consensus, and Reuters' and Bloomberg's own pages were unavailable for direct verification at the time of writing, so it is best read as the chair of SK Group's view of the supply curve rather than a confirmed market outlook. Even with that caveat, a four-year horizon on tight supply is enough to plan around: phone makers buying on annual contracts now compete for fab capacity against data center buyers with multi-year, billion-chip orders.
The honest test for whether this is a one-off or the start of a wider squeeze is what happens to the next round of budget phones from other brands. If major Android makers keep their entry-level handsets at 2024–2025 prices and memory footprints, Nothing's CMF Phone 3 Pro will read as a casualty of one company's product economics. If they quietly cut RAM, raise sticker prices, or pull lower-tier models, the AI-driven memory squeeze will have moved from one named cancellation to a market-wide pattern, and the CMF Phone 3 Pro will be the first entry on a longer list.