Chinese device makers hit by 600% memory price surge

China’s device manufacturers face rising costs as memory prices have surged over 600% in the past year, according to reports from TrendForce and Counterpoint Research.

The increase is driven by a supply crunch caused by high demand from AI data centers.

Global smartphone production in 2026 is expected to drop 10% to about 1.1 billion units.

Cost-sensitive brands like Xiaomi and Transsion have lowered shipment targets, while Huawei is seen as more resilient due to flexible pricing strategies.

Costs for memory used in broadband hardware, such as routers and set-top boxes, have nearly increased sevenfold over nine months.

Memory’s share in device costs has risen from 3% to over 20%. This could slow China’s 5G rollout, as telecom operators face higher procurement expenses and potential deployment delays.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

The price jump is squeezing budget phones

Memory used to account for 10–15% of a smartphone’s bill of materials, but it now takes up 30–40% of total cost 1.
Margins are getting hit. Transsion said 2025 net profit attributable to shareholders was set to fall 54.11% year on year, partly from higher component costs including memory 2.
The burden lands harder on cheaper devices. UBS put the memory increase for low- and mid-range phones at about US$16 per handset, around 6% of average selling price, compared with about a 2% cost hit for high-end models 2.
Price increases are already on the table. Xiaomi CFO Lu Weibing said the company plans to “mitigate the hike by increasing product prices and optimising product structures” 3.

AI-driven memory demand is raising costs across consumer electronics

The squeeze goes beyond phones. Global TV shipment forecasts are being cut as parts get more expensive 4.
Memory’s share of a TV’s bill-of-materials cost is expected to climb from 2.5–3% to 6–7% during the current run-up 4.
Laptops are also facing headwinds. Notebook shipments are forecast to drop 9.4% year on year in 2026, with rising memory and CPU prices adding to the pressure 4.
Prices may stay elevated. The memory market is forecast to reach $842.7 billion in 2027, with 53% year-on-year growth, which suggests AI demand could keep costs high for years 5.