Global memory chip prices are climbing steadily, and the ripple effects are now hitting the consumer electronics supply chain. After Oppo and OnePlus kicked off price hikes on March 10, Vivo and iQOO followed on March 16, announcing increases of 500 to 1,000 yuan ($70 to $140) on select models starting March 18.
Taken together, these moves signal one of the most notable waves of smartphone price adjustments China has seen in years, as upstream component pressures are now directly reshaping pricing at the consumer level.
AI demand drives imbalance in memory supply and fuels price increases
The current wave of price increases is being driven by the rapid expansion of AI infrastructure demand. According to TrendForce, global AI server shipments are expected to grow by more than 28% year-on-year in 2026, significantly boosting demand for DRAM and NAND flash.
Memory makers have reinforced this trend. Micron Technology said data center and AI applications are becoming key growth drivers for the industry, while SK Hynix and other chipmakers have flagged strong AI-related demand and tightening supply for high-end products.
Industry analysts widely believe that, driven by higher margins, memory makers are allocating more resources to high-bandwidth memory (HBM) and server-related products. This structural shift is squeezing supply for consumer-grade memory chips and pushing prices higher. TrendForce also expects memory prices to remain on an upward trend in 2026.
Cost pressures pass through to end markets
As memory prices rise, cost pressures on smartphone makers are increasing rapidly. Memory chips now account for a larger share of a phone’s bill of materials, making them a key factor driving device price adjustments.
Counterpoint Research says rising memory costs are squeezing margins for mid- and low-end models, while some vendors have responded with price hikes or product mix adjustments.
At the same time, industry data shows that contract prices for Dynamic Random Access Memory (DRAM) and NAND flash have been climbing since the second half of 2025 and continue to trend upward in 2026, further increasing cost burdens for device manufacturers.
Industry landscape diverges further
Amid rising cost pressures, major smartphone makers are offsetting risks through premiumization and product mix optimization, while smaller brands face mounting challenges.
Honor has kept the starting price of its foldable Magic V6 unchanged, although higher-storage variants have seen price increases. Meanwhile, Xiaomi President Lu Weibing said memory cost pressures are likely to persist for some time.
According to IDC, the global smartphone market recovery remains uncertain, while average selling prices are expected to rise. The industry is likely to see shipment volumes come under pressure even as prices increase, with market share continuing to consolidate among leading players.
Consumers turn more cautious
Against the backdrop of rising memory prices, consumers are becoming more cautious in their purchasing decisions. At the same time, government subsidies continue to provide partial relief. Under China’s consumer electronics subsidy program, smartphones priced below 6,000 yuan ($830) are eligible for a subsidy of up to 15% of the retail price, capped at 500 yuan ($70) per device, according to official policy documents.
However, such measures may only offset part of the cost pressure. With memory prices rising sharply and global smartphone shipments projected to fall by around 13% in 2026, according to IDC, higher prices are increasingly weighing on consumer demand.
Consumers with immediate upgrade needs may choose to buy ahead of further price increases, while others are likely to delay purchases in anticipation of a potential easing in memory supply after 2027.
