Xiaomi Anticipates Smartphone Prices to Surge in 2026 Due to Memory Chip Shortage
Xiaomi has predicted that a shortage of memory chips in 2026 may lead to a huge increase in smartphone prices. The company joins a growing list of firms warning about a possible supply crunch on the critical component.
Lu Weibing, partner and president of the Xiaomi Group, confirmed that while Xiaomi has secured its full-year supply for 2026, the company will be passing rising costs of the components onto product pricing.
How Did It Happen: AI's Insatiable Demand for Memory
It is Lu Weibing's contention that the anticipated rise in prices of memory chips is a long-term issue, as opposed to other short-term market cycles. He stated: "this round is mainly due to the strong rise in HBM demand brought by AI, driving up global (memory prices), which is quite different from before."
The global race in setting-up AI data centers has created enormous demand for High Bandwidth Memory (HBM) chips. For this reason, large producers like Samsung are reallocating HBM towards chips and decreasing the production of memory chips used in consumer products, including smartphones.
Effects on Consumers and Xiaomi's Approach
Lu Weibing has stated that consumers will directly suffer huge hikes in the retail price of the product. He said that while some of the rising memory costs will be absorbed by these adjustments in price, the dwindling effects can never offset the full cost.
This deal is already in effect; the Redmi K90 flagship was already priced higher in October, with rising memory chip costs cited as one of the reasons. The company is continuing to push into premium with the launch of the upcoming Xiaomi 17 series to challenge Apple rather than concentrate on consolidating its position in the mid-range.
Background to Company Performance
This forecast comes at a time when Xiaomi is in good financial condition. Recently, it made the declaration that its quarterly profits surpassed expectations with Q3 revenues increasing by 22.3% to 113.1 billion yuan, and this report also marked the first time the electric vehicle unit of Xiaomi recorded profits in a single quarter.
