Xiaomi Lifts Handset Prices As Memory Chip Crunch Ripples Through Supply Chain

Xiaomi has raised prices on several smartphone models, joining a broader wave of increases across China’s handset makers as surging memory chip costs ripple through the global consumer electronics supply chain.

The company said on Friday that prices for three models would rise by about 200 yuan (US$29), with the adjustments taking effect next Saturday. The move follows similar increases by domestic peers including Oppo, Vivo and Honor in March.

Xiaomi attributed the hike to “continued sharp increases in the prices of key components such as memory chips”.

“This round of price increases has far exceeded expectations,” Lu Weibing, president of Xiaomi’s smartphone business, said in a Weibo post on Friday, adding that memory prices for comparable configurations had surged nearly fourfold from a year earlier.

The increases reflect a broader upswing in consumer electronics prices – spanning smartphones and personal computers (PCs) – driven largely by tightening supply and rising memory costs, as manufacturers prioritise capacity for fast-growing artificial intelligence demand.

Chipmakers have struggled to expand output quickly, while upstream costs – including chemicals, metals, energy and freight – have climbed amid geopolitical tensions, fuelling a wider round of price rises across the semiconductor industry, including analogue chips and power devices.

Conventional dynamic random access memory (DRAM) contract prices were expected to climb 58 to 63 per cent quarter on quarter in the second quarter of 2026, while NAND flash prices could jump 70 to 75 per cent, driven primarily by demand from AI and data centres, according to a TrendForce report this week.

Xiaomi has attributed the hike to ‘continued sharp increases in the prices of key components such as memory chips’. Photo: Getty Images

DRAM is the fast, short-term memory that enables devices such as smartphones, PCs and servers to run applications, while NAND flash provides longer-term storage for data such as photos and files.

In the consumer electronics sector, PC demand has softened, but tighter allocations are forcing manufacturers to procure memory at higher prices. Smartphone makers faced mounting cost pressures but had yet to significantly curb demand, while suppliers continued to push through price increases, TrendForce said.

Memory costs are also driving up spending on data centre build-outs. Memory accounted for about 8 per cent of hyperscaler spending in 2023 and 2024, but that share was projected to rise to roughly 30 per cent in 2026 and increase further in 2027, according to a post by SemiAnalysis.

The research firm said it expected DRAM prices to more than double in 2026, with further double-digit increases in 2027, while LPDDR5 prices had already more than tripled since early 2025.

Prices may have exceeded US$10 per gigabyte in the first quarter of this year on the open market, it estimated.

Xiaomi’s price rise comes as its smartphone business faces margin pressure. The company, which has expanded into home appliances and electric vehicles, reported smartphone revenue of 186.4 billion yuan in 2025, down 2.8 per cent year on year.

Shipments totalled 165 million units, accounting for 40.8 per cent of total revenue. In the fourth quarter, smartphone gross margins fell to 8.3 per cent from 12 per cent a year earlier.