Rising Memory Costs Drive Global Shift Toward Recycled and Refurbished Hardware
Manufacturers and enterprises are increasingly adopting circular IT strategies to combat soaring component prices.
1Industry Adopts Reballed Memory
Smartphone manufacturers are increasingly using reballed memory to manage rising production costs. This process involves salvaging memory chips from discarded devices by melting and re-soldering connections. Currently, this practice accounts for 3–4% of the market, primarily in budget smartphones priced below CNY 1,299, but it is expected to reach 7–9% by 2027.
2AI Demand Strains Supply
Memory costs have quadrupled this year as manufacturers prioritize high-bandwidth memory for AI datacenter servers. This shift creates a supply squeeze for standard components, forcing smartphone makers and enterprises to seek alternatives. As DRAM prices are projected to rise further in early 2027, the pressure to adopt recycled components will likely intensify across sectors.
3Circular Economy Gains Traction
Enterprises are keeping hardware longer due to economic uncertainty, fueling demand for refurbished IT equipment. Suppliers are now linking refresh cycles with value recovery from aging assets. Experts predict that by 2030, 35% of all hardware sold through channel partners will be reclaimed, driven by the economic logic of circular IT lifecycles and capital recovery.
4Verification Builds Market Trust
Trust remains the primary barrier to widespread refurbished hardware adoption. Industry leaders are currently collaborating with vendors like HP, Lenovo, and Dell to establish standardized verification methodologies. Providing warranties of up to three years, similar to new product support, is proving essential in making secondhand equipment a viable option for risk-averse corporate buyers.
5Supply Chain Constraints Persist
While demand for refurbished smartphones and PCs is growing, supply remains a significant challenge. Persuading customers to trade in old devices is difficult, limiting the availability of stock for refurbishment. Companies like XTENTEC are now financing residual values at the end of usage cycles to incentivize returns and ensure a steady flow of hardware.
6Technical Expertise and Innovation
Reballing is a technically demanding process requiring specialized equipment to handle tiny BGA solder connections. Beyond industrial smartphone applications, hobbyists are also repurposing laptop memory for desktop use. One project successfully converted a $120 DDR5 SO-DIMM kit into high-speed desktop modules, demonstrating the extreme lengths taken to bypass current market pricing.
7Redefining Corporate Success Metrics
Current corporate focus on quarterly sales and market share often discourages refurbishment initiatives. Industry advocates argue that companies should implement a specific market share figure for circularity to align business goals with sustainability. Integrating lifecycle services into initial purchasing decisions, rather than adding them years later, is seen as a necessary strategic evolution.
8Future Market Outlook
What began as a cost-saving measure for entry-level devices is evolving into a broader strategy for managing expenses. As sustainability requirements in public and private tenders increase, the shift toward recycled components will likely expand into premium segments. The industry is moving toward a model where hardware longevity is prioritized over constant new sales.