“Memory Price Surge” For 100 Days, Low‑End Smartphones Forced Into Decline

Xiaomi acknowledged that the price increases have been “painful,” and Transsion, Lenovo, OPPO and Vivo have subsequently implemented price hikes. The consumer electronics sector is broadly attempting to offset the erosion of margins caused by rising memory costs through higher retail prices, and the impact has rapidly reached end consumers. Reports have emerged of lifetime‑warranty memory modules encountering faults while after‑sales channels offer refunds rather than replacements, a fulfillment conflict driven by the scale of the price surge.

Discussions on social platforms and e‑commerce comment sections frequently note memory prices doubling, with storage jokingly likened to “electronic gold.” Xiaomi President Lu Weibing quantified the escalation at MWC, stating that first‑quarter 2026 memory quotes rose roughly 400% year‑on‑year, from about USD 30 to above USD 120. A founder of a mini‑PC brand observed that elevated costs have rendered consumers indifferent to specifications, as price sensitivity has been overwhelmed by supply and cost constraints.

Transsion, often described as the “King of Phones in Africa,” was among the earliest manufacturers to feel margin pressure from component cost increases. In its 2025 earnings preview, the company attributed a decline in overall gross margin to higher prices for components such as memory. Industry researchers tracking the memory supply chain noted that Transsion had little inventory remaining, although that specific supply shortage was not independently confirmed.

Apple has also acknowledged the dual risks of supply constraints and cost pressure. At its recent fiscal‑quarter briefing, Tim Cook identified limitations in advanced process node availability for system‑on‑chips and noted that memory cost increases, while having limited impact on the first quarter, are expected to exert greater pressure on second‑quarter margins. Analyst Ming‑Chi Kuo observed that Apple’s DRAM and NAND consumption represents roughly 20%–25% of the smartphone storage market, and Apple’s strong cash position enables it to secure supply even amid steep price increases. Nonetheless, industry participants point out that the market has shifted from annual to quarterly contracting for memory supply, reflecting the seller’s market dynamics.

Lenovo disclosed in late 2025 that it had signed long‑term supply agreements with key component vendors to address sustained memory price inflation driven by AI demand. Despite that, subsequent reports indicated Lenovo issued price‑adjustment notices to channel partners and raised prices on certain PC models. Huawei implemented price increases earlier, and some observers suggested Lenovo’s later action reflected a one‑quarter lag in inventory management. With inventories declining and memory quotes remaining elevated, many brands have transferred cost pressure to consumers. Regional logistics and geopolitical factors have compounded the situation in certain markets.

The memory price surge is materially affecting device economics. Counterpoint’s storage price tracking report shows that in the first quarter of 2026 DRAM prices rose more than 50% quarter‑on‑quarter and NAND prices rose more than 90% quarter‑on‑quarter. For low‑end smartphones with wholesale prices below USD 200, maintaining other costs constant, a 6GB LPDDR4X + 128GB eMMC configuration would increase total material costs by about 25%, with storage accounting for approximately 43% of the bill of materials. Counterpoint’s analysts emphasize that this structural shift makes selling entry‑level devices unprofitable in the short term, prompting manufacturers to reduce shipments or discontinue entry‑level product lines once existing inventory is exhausted.

Manufacturers are exploring mitigation measures, including specification optimization and engineering adjustments to balance performance and cost, but such measures are unlikely to fully offset the magnitude of the price increases. Industry sources note that customers at this stage prioritize supply stability over price. However, passing costs to consumers can depress demand, creating a dilemma for brands: if they do not raise prices, they risk stock shortages; if they do, demand may fall.

The memory supply reallocation toward AI workloads is a core driver of the current imbalance. Since the second half of 2025, some suppliers have aggressively shifted capacity to support AI inference demand, and leading overseas manufacturers have reduced support for consumer‑grade products in favor of higher‑margin AI segments. Domestic memory suppliers face both market pressures and obligations to secure supply for local customers, but the overall industry incentive structure favors AI‑oriented capacity allocation. While some analysts expect memory prices to ease in 2027 or 2028, the persistent expansion of AI demand and limited supplier motivation to restore prior consumer‑market support suggest the storage industry may not return to its former equilibrium unless capital flows into AI infrastructure subside. An alternative scenario would be a significant correction in AI investment, which could relieve pressure on consumer storage supply.