Skyrocketing costs for memory will jack up smartphone prices — Chinese manufacturer Xiaomi warns of higher prices for new devices

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Xiaomi blames memory chip price surge for increased smartphone costs

Samsung
(Image credit: Samsung)

The increasing cost of memory chips seems to be slowly creeping into the smartphone industry. Chinese smartphone manufacturer Xiaomi saw a disappointing response to its newly launched Redmi K90 range. According to a Reuters report, Xiaomi President Lu Weibing wrote in a social media post that cost pressure is being passed on to the pricing of the company's new and upcoming products.

For context, Xiaomi launched its budget-centric Redmi K90 series in China on Thursday. The base configuration featuring 12GB of memory and 256GB of storage is priced at 2,599 Yuan ($364), which is about 100 Yuan ($14) more than the previous-generation Redmi K80, which launched in November 2024.

Back in September, memory and storage manufacturer SanDisk announced a 10% NAND price increase, while Micron temporarily suspended DRAM and NAND price quotations to reassess allocations after forecasts indicated shortages. Meanwhile, Samsung’s next-generation V9 NAND, claimed to offer improved density and cost advantages, is nearly sold out ahead of its expected release in the first half of 2026.

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Kunal Khullar
Kunal Khullar
News Contributor

Kunal Khullar is a contributing writer at Tom’s Hardware.  He is a long time technology journalist and reviewer specializing in PC components and peripherals, and welcomes any and every question around building a PC.

8 Comments Comment from the forums
  • Notton
    Great, absolutely perfect timing. /s
    Apps and games in 2025 demand more and more memory, yet we get hit with memory price increases.
    Better get a phone that'll last you for the next 10yrs at this rate.
    Reply
  • ezst036
    Admin said:
    Skyrocketing costs for memory will jack up smartphone prices
    That won't matter here in the U.S. so much with the vast majority of phones being subsidized by carriers. People sign contracts and pay very little for the hardware.
    Reply
  • George³
    Large companies negotiate component prices directly with the manufacturer, without any intermediaries, and "lock" them in for years to come. So, market price changes are unlikely to affect them.
    Reply
  • Alvar "Miles" Udell
    I don't think so. Smartphone manufacturers already charge an enormous price premium for storage and RAM, and as mentioned above a large number of US residents get their phone "for free" through their carrier, but I think the biggest reason it won't have much, if any, effect is that globally smartphone sales are flat to even down as people who buy their phones keep their phones longer due to both minimal changes between most generations (Galaxy S23, 24, and 25 are all basically the same with the S26 tipped to basically be the same as well) so there's no real drive every year or even every other or third year to upgrade, especially in the Chinese market where their phones are packed with much higher specs.
    Reply
  • bit_user
    ezst036 said:
    That won't matter here in the U.S. so much with the vast majority of phones being subsidized by carriers. People sign contracts and pay very little for the hardware.
    Uh, yeah, and then the carriers will just pass those price increases onto consumers, in the form of higher service fees! These companies aren't in the business of losing money! Whenever their costs increase, it's ultimately the consumer who will pay.

    George³ said:
    Large companies negotiate component prices directly with the manufacturer,
    When there's a supply shortage, the customer loses negotiating leverage. In a tight market, the suppliers have no incentive to do them any favors on pricing. They will pay more, because they need the parts.

    Also, we might even see jump in the popularity of models with less memory. This could limit price impacts on the consumer, but they won't be seeing the gains in specs they're used to.
    Reply
  • ezst036
    bit_user said:
    Uh, yeah, and then the carriers will just pass those price increases onto consumers, in the form of higher service fees! These companies aren't in the business of losing money! Whenever their costs increase, it's ultimately the consumer who will pay.
    When the hardware fee increases from $15 to $16 a month mixed-in with the rest of the monthly mobile subsidy nobody is going to bat eye. I know full well the mobile companies will not under any circumstances be "eating it".

    The mobile carriers (VZ, ATT, TM) have been covering up and redistributing their costs and essentially internally cooking their books for a long time. Increased prices on just the memory will be easy for them to shift around to wherever the nickels need to be pulled, meanwhile keeping their customers happy and not complaining.

    How long have we had subsidized phones now, for like 3 decades? This goes back to the 90s or early 2000s I think.
    Reply
  • bit_user
    ezst036 said:
    When the hardware fee increases from $15 to $16 a month mixed-in with the rest of the monthly mobile subsidy nobody is going to bat eye.
    It just feeds into the overall inflation picture. High inflation is anything significantly above 2%. For instance 7% inflation would be considered high. Are you going to notice a 7% year-on-year price increase on a single item or service? Maybe not if only one thing goes up by exactly 7% and isn't one of the biggest items in your budget, but if all your costs went up by 7%, then you'd notice you had less money at the end of the month.

    ezst036 said:
    I know full well the mobile companies will not under any circumstances be "eating it".
    Even though you say that, you seem to go on to contradict yourself.

    ezst036 said:
    The mobile carriers (VZ, ATT, TM) have been covering up and redistributing their costs and essentially internally cooking their books for a long time. Increased prices on just the memory will be easy for them to shift around to wherever the nickels need to be pulled, meanwhile keeping their customers happy and not complaining.
    Are you saying they will eat the higher hardware prices by using other profitable areas to further subsidize it? That's what it sounds like. I think they won't eat higher handset prices, if they don't have to. They'll find ways to pass it on to consumers, in the form of some combination of higher monthly rates for at least some tiers, higher fees for exceeding monthly quotas, higher roaming or out-of network charges, etc.

    ezst036 said:
    How long have we had subsidized phones now, for like 3 decades? This goes back to the 90s or early 2000s I think.
    If you look at discount carriers, they don't give away any phones except maybe garbage tier models. What they do is offer a partial subsidy when you buy a handset through them, and those subsidies will probably be less.
    Reply
  • ezst036
    bit_user said:
    They'll find ways to pass it on to consumers, in the form of some combination of higher monthly rates for at least some tiers, higher fees for exceeding monthly quotas, higher roaming or out-of network charges, etc.
    Exactly.

    The mobile carriers (VZ, ATT, TM) have been covering up and redistributing their costs and essentially internally cooking their books for a long time. Increased prices on just the memory will be easy for them to shift around to wherever the nickels need to be pulled, meanwhile keeping their customers happy and not complaining.
    bit_user said:
    If you look at discount carriers, they don't give away any phones except maybe garbage tier models.
    I forgot about those, but even there users have the cushion of "not paying for it" through that mobile subsidy gimmick.

    Hey, it works. And users won't notice the increased memory prices.
    Reply