Rising Memory Prices Push Up Smartphone Prices; Xiaomi’s Lu Weibing Warns Budget Models Hit Hardest

Xiaomi Group partner and president Lu Weibing said on July 2, 2026 that the smartphone industry is facing its toughest period in a decade as surging component costs squeeze the market, with budget phones in the 1,000-yuan segment suffering the most, according to Jiemian News. He said some models have moved up to higher price tiers and features once considered standard are becoming rarer in low-end devices. TrendForce data cited in the report showed DRAM contract prices rose 90%-95% quarter-on-quarter in Q1 2026 and 58%-63% in Q2 2026, while NAND flash contract prices increased 55%-60% in Q1 and 70%-75% in Q2. OPPO raised prices for some models by 300-500 yuan on March 10, 2026, with other brands including vivo, Xiaomi and Honor following; mid-range models generally rose 300-800 yuan and some flagship models increased by more than 1,000 yuan. IDC said memory’s share of smartphone costs has risen from 10%-15% to above 20%, and is close to 30% for mid- and low-end phones. The report said Huawei launched its Enjoy 90 series in March 2026 priced at 1,299 yuan for the 8GB+128GB version, and BCI data showed Huawei ranked No. 1 by share in China’s 1,000-2,500 yuan segment for 10 consecutive weeks from W14 to W23, helped by the series. Jefferies analysts forecast memory prices will rise 40%-50% quarter-on-quarter in Q3 2026 and 30%-40% in Q4 2026, while a semiconductor analyst at Sigmaintell said the incremental storage cost has already consumed the entire profit of budget phones and predicted shipments of models priced below 1,500 yuan will be cut, with sub-1,500 yuan smartphones potentially becoming rare in 2027.