Issue Hardware costs of generative AI phones slow diffusion in price-sensitive markets

Summary

KISDI cautions that implementing generative AI services on smartphones requires demanding hardware such as high-performance NPUs and memory. This keeps upward pressure on device prices. In mid and low-priced markets, especially those centred on emerging economies, the resulting cost structure may slow the spread of generative AI phones. The institute therefore expects adoption to differ considerably by price band and by region. In its 2026 export outlook it also finds that, despite the boost from generative AI phones, longer replacement cycles and the growth of Chinese vendors will hold Korea's communication and broadcasting equipment exports to about 0.5 percent growth.