Memory Price Surge Persists For 100 Days, Forcing Low‑End Smartphones Toward Extinction

Xiaomi acknowledged that the recent price increases have been “painful,” and Transsion, Lenovo, OPPO and Vivo have each announced price adjustments. The consumer electronics sector is broadly attempting to pass rising memory costs through to end customers, and the effects have already surfaced in after‑sales disputes, where lifetime‑warranty memory modules have been refunded rather than replaced—an execution dilemma driven by the magnitude of the price spike.

Online commentary and e‑commerce reviews are rife with reports of memory prices doubling, with storage increasingly joked about as “electronic gold.” At Mobile World Congress, Xiaomi President Lu Weibing quantified the escalation: first‑quarter 2026 memory quotes were roughly four times year‑earlier levels, rising from about USD 30 at the trough to in excess of USD 120 for a 12GB+256GB combination. A founder of a mini‑PC brand observed that elevated costs have shifted consumer behavior, with buyers now less attentive to capacity specifications as price and supply constraints dominate purchasing decisions.

Transsion, often described as the “King of Phones in Africa,” was among the earliest vendors to report margin pressure from component inflation. 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 supply chain noted reports of depleted inventory at some vendors, although those supply‑shortage claims have not been independently verified.

Apple has also flagged the dual risks of supply constraints and cost pressure. At its recent quarterly briefing, Chief Executive Tim Cook identified advanced process node availability for system‑on‑chips as a supply constraint and said 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 noted that Apple’s DRAM and NAND consumption accounts for roughly 20%–25% of the smartphone storage market, and Apple’s strong cash position enables it to secure supply even amid steep price increases. Market practice has shifted from annual to quarterly contracting for memory supply, reflecting the transition to a seller’s market.

Lenovo disclosed in late 2025 that it had signed long‑term supply agreements with key component vendors to mitigate sustained memory price inflation driven by AI demand. Nevertheless, 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, while regional logistics and geopolitical factors have compounded distribution challenges in certain markets.

The price dynamics are materially altering 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, holding other costs constant, a 6GB LPDDR4X + 128GB eMMC configuration would raise total material costs by about 25%, with storage representing roughly 43% of the bill of materials. Counterpoint’s analysts emphasize that this structural shift renders 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 pursuing mitigation measures such as specification optimization and engineering adjustments to rebalance cost and performance, but these steps are unlikely to fully offset the scale of the price increases. Industry sources report that, at present, customers prioritize supply stability over price. Passing costs to consumers risks depressing demand, creating a dilemma for brands: failing to raise prices can lead to stock shortages, while raising prices can reduce sales volumes.

The reallocation of memory capacity toward AI workloads is a central driver of the current imbalance. Since the second half of 2025, some suppliers have aggressively shifted production to support surging AI inference demand, and leading overseas manufacturers have curtailed 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 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 revert to its previous equilibrium unless capital flows into AI infrastructure subside. An alternative scenario that could relieve pressure would be a significant correction in AI investment.