Xiaomi has moved relatively quickly in an increasingly difficult terrain by securing its memory chip requirements for the entire year 2026.
Xiaomi President announces that the company has entered into a contract to ensure adequate memory chip supplies for 2026
As per the reporting by the Chinese publication Aijiwei, Lu Weibing, the President of Xiaomi Group, has now announced that the smartphone manufacturer has managed to secure adequate memory chip supplies for 2026 by entering into a dedicated contract.
Weibing did not mention the company with which Xiaomi has just entered into a contract. Even so, the entity is likely to be China's YMTC. Do note that the company is still procuring memory chips from Samsung, SK Hynix, Micron, Kioxia, and Western Digital.
However, the cost of securing a guaranteed supply of memory chips would be steep and, accordingly, Xiaomi expects a sharp increase in the retail prices of its products. Of course, as the company continues to scale the smartphone value chain by launching increasingly premium smartphones, its capacity to pass on component costs is also expected to increase proportionally.
While noting that the current upswell in memory chip costs would constitute a "long cycle," Lu Weibing went on to observe:
"In the past, it was basically a large fluctuation cycle in the mobile phone industry that affected the price of the entire memory. However, this round was mainly due to the strong increase in HBM demand brought by AI, which drove the world (memory prices rose), which was different from before."
Of course, this is not the first time in recent weeks that Xiaomi has commented on memory costs translating into price increases for its products.
While trying to deflect criticism over the price hikes for its Redmi K90 smartphone, Weibing had noted in a Weibo post that Xiaomi "cannot change the trend of global supply chains, and the rise in storage costs is much higher than expected and will continue to increase."
As we had noted at the time, Weibing then went on to announce a discount of 300 yuan ($42) on the 12GB + 512GB base version of the Redmi K90 series, indicating enough of a cushion in the smartphone's initial margin calculations to allow for carving out a significant discount subsequently.
Meanwhile, with NVIDIA now opting to use smartphone-specific LPDDR memory chips in its AI servers to reduce their power footprint, the ongoing tightness in the memory sphere, especially for smartphone OEMs, is about to turn into a literal drought.
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