Phone prices jump amid AI chip supply squeeze
Baku, September 3, AZERTAC
A fresh wave of price hikes has hit China's smartphone market, as Huawei, Xiaomi and Honor increased retail prices for several current models by between 200 ($29.75) and 1,000 yuan, triggering heated chatter on social media, according to China Daily.
The coordinated adjustments come amid tightened memory chip supply and sustained price increases for key semiconductors.
Huawei led the increases, with its Mate 80 series jumping by as much as 1,000 yuan on Tuesday, while the 90 Pro Max sold for an extra 200 yuan. Xiaomi, which had already adjusted prices on Aug 2, raised the Xiaomi 17 and 17 Pro by 300 yuan each — its second hike in less than a month.
Honor followed suit, lifting its Power2 by 500 and 600 yuan for its two variants, and increasing its flagship Magic8 series by 300 to 500 yuan across versions, bringing post-hike prices to between 4,799 and 5,999 yuan.
In response to the increases, a Huawei customer service representative said the upward adjustments were necessary because "market prices of key materials have changed, leading to higher production costs".
At the crux of the surge is a structural imbalance in global memory chip supplies. As artificial intelligence model training and AI server infrastructure expand at a breakneck pace, major memory makers — Samsung, SK Hynix and Micron — have shifted substantial high-end capacity toward high-margin HBM (high bandwidth memory), mainly used in servers, thus directly squeezing the supply of handset-oriented DRAM and NAND memory chips. That supply crunch has sent mobile memory prices soaring.
Market research firm Trend-Force said in a recent report that memory prices have accumulated a five- to seven-fold increase since the start of 2025, forcing brands to either raise prices sharply or discontinue product lines that have turned loss-making.
The cost pressure, however, is no longer limited to storage. In late July, Qualcomm Inc CEO Cristiano Amon said the chipmaker planned to raise its product prices effective Sept 1.
Amon explained that the hike reflects broader cost increases across the supply chain. This means smartphone makers now face a dual squeeze from both memory and SoC (system-on-chip) costs — a major factor behind the simultaneous retail price adjustments seen on Tuesday.
The current round of price increases differs somewhat from previous ones. In the past, price hikes typically accompanied new product launches, justified by upgraded features or specifications, experts said.
This time around, however, brands are directly raising prices on devices already available in the market. Xiaomi's case is particularly telling: its Tuesday increase came less than a month after its Aug 2 hike, indicating that manufacturers are passing on costs gradually through multiple small adjustments rather than a single large spike, as component costs remain stubbornly elevated.
Top executives had already hinted at the coming price increases. On Aug 5, Huawei's executive director and chairman of its terminal business group, Yu Chengdong, warned that "with memory prices so high, all phones may have to see large-scale price rises in the future; otherwise, they would be sold at a loss".
In a May livestreaming session, Xiaomi President Lu Weibing predicted that by the second half, some domestic flagship slab phones could break through the 10,000-yuan price barrier.
Indeed, the industry has been grappling with rising prices since the third quarter of last year. Almost every major brand — Samsung, Oppo, Vivo, Huawei and Honor — has raised retail prices to varying degrees, with mid-range and entry-level models typically seeing increases of 300 to 500 yuan, while high-end flagships and foldables have recorded hikes exceeding 1,000 yuan.
According to US market research firm International Data Corp, China's smartphone shipments in the second quarter stood at approximately 66 million units, a year-on-year decline of 4.3 percent, continuing a streak of quarterly drops. For the first half, total shipments reached about 134 million units, down 4.2 percent from the same period last year.
Other news in this section
