Xiaomi's Warning on the Unstoppable Rise in 2026 Smartphone Prices
The New Economic Reality for Your Next Phone
The smartphone market has always linked innovation with increasing value—but in 2026, a powerful external force is about to redefine that connection: the Artificial Intelligence (AI) revolution.
After announcing strong Q3 earnings, Xiaomi President Lu Weibing issued a clear and serious warning: smartphones launching in 2026 will be more expensive than those we see today.
This is not a routine price adjustment; it is a structural shift caused by a global battle over one of the most critical components of modern electronics—memory chips.
The explosive global demand for computing power inside massive AI data centers is absorbing the manufacturing resources of leading companies like Samsung, SK Hynix, and Micron. These companies are prioritizing highly profitable, AI-focused memory such as HBM (High Bandwidth Memory).
As a result, supply of LPDDR RAM and NAND storage—the memory used in smartphones—has dropped sharply, sending their prices soaring.
Lu Weibing summarized the situation bluntly:
“I expect pressure to be much heavier next year than this year. Consumers are likely to see a sizeable rise in retail prices. Some of the pressure may have to be addressed through price hikes, but price increases alone won’t be enough to digest it.”
This is a powerful admission that smartphone prices will not just rise—they will rise faster than before. We are entering a new era where AI investments indirectly act as a hidden tax on every new device you buy.
Why Memory Prices Are Surging
To understand the severity of this issue, we must look at the economic dynamics behind the current memory market “supercycle.”
The AI Data Center Gold Rush
The AI boom is not just about new apps—it is a global, multi-trillion-dollar infrastructure race. Training and running advanced Large Language Models requires massive volumes of specialized, high-performance memory chips.
Here’s what’s driving up smartphone memory prices:
- Capacity Shift: Chipmakers are diverting wafer capacity away from standard smartphone memory toward more profitable AI-oriented chips.
- Severe Supply Shortage: This reduction has led to 40%–60% price jumps in LPDDR and NAND within only a few months in late 2025.
- Panic Buying: Smartphone brands are bulk-buying memory for 2026 models, further tightening supply and accelerating price inflation.
- BOM Pressure: Memory makes up 18–20% of a flagship smartphone’s cost. When memory prices surge, overall production costs jump by 5–7% or more—forcing companies to raise retail prices.
Lu Weibing’s Critical Analysis
Xiaomi, known for its aggressive pricing and value, is the last company expected to warn about rising costs.
But even Xiaomi admits the pressure is overwhelming:
“Storage cost rises are far beyond expectations and may continue to intensify.”
Calling this a structural shortage, not a temporary spike, Lu warns of two outcomes:
- Directly Higher Prices – unavoidable across all segments
- Reduced RAM/Storage Configurations – to prevent shocking price tags
A phone that shipped with 12GB RAM in 2025 may come with 8GB in 2026 at the same price.
Global Impact: Who Suffers the Most?
The new “AI Tax” will not affect all categories equally.
Budget Smartphones: The Biggest Victims
The low-to-mid-range market will experience the most damage.
- Extremely Thin Margins:
- Forced Price Hikes:
- Value Collapse:
Flagship Phones: Entering Ultra-Premium Territory
Flagships will also rise in price, though less proportionally.
- High-end Components Already Costly
With 2nm processors, advanced cameras, and top-tier storage, flagships feel the full weight of component inflation.
- The $2,000 Barrier
How Consumers Should Prepare for 2026
Lu Weibing’s warning is more than a simple announcement—it is a signal of a major shift in the global tech economy.
AI’s massive resource consumption has created a new competitor for memory chip supply, permanently raising production costs for smartphones.
Combined with aggressive price hikes from Samsung, SK Hynix, and Micron, the result is clear:
Smartphones in 2026 will be significantly more expensive—or offer lower specifications at the same price.
🔔 What You Should Do Now
If you are planning to buy a new smartphone:
✔ Consider buying a 2025 model before prices jump
✔ Expect weaker base configurations in 2026
✔ Follow reliability-focused tech channels for updates
The “Chipflation Catastrophe” of 2026 is real—and already reshaping the industry.
Stay Ahead with Technologies for Mobile
For ongoing updates, deep analysis, and buyer’s guides: