Huawei to hold the line as memory price surge hits China’s smartphone makers: report

The math of smartphone pricing in China is turning brutal. Memory chip costs, which have climbed sharply over the past year, are now forcing handset makers into a corner they have not faced since the pandemic rattled supply chains. Absorb the hit, raise prices, or cut corners on components — none of these options looks palatable for brands already fighting for scraps in a shrinking market. Xiaomi’s president, Lu Weibing, laid the problem bare during a live stream last month. He warned that non-foldable flagship phones sold in China could cross the 10,000-yuan mark by the end of 2026. That is a psychological threshold few local brands have dared to breach. The warning came as Xiaomi’s first-quarter shipments dropped 19 percent year on year, with full-year volumes projected to tumble 28 percent. The company is caught between soaring memory bills and a weakening grip on the midrange and low-end segments that have long been its bread and butter. Huawei, by contrast, is playing a different game. Counterpoint Research estimates it was the only major Chinese brand to post shipment growth in the first quarter — a modest 1 percent rise. That performance is not accidental. Huawei has deliberately held prices steady, using its pricing discipline to scoop up market share from rivals squeezed by rising costs. Bernstein noted that Huawei’s first-quarter smartphone margin exceeded expectations, helped by a richer product mix and lower-cost memory inventory. But that cushion is thinning; pressure from higher memory prices is expected to persist into the second and third quarters. The broader picture is grim. Global smartphone shipments are projected to plunge nearly 14 percent this year to about 1.08 billion units, the lowest volume since 2013. In China, the pain is concentrated among Android vendors. Oppo, Vivo and Transsion face a double bind: higher component costs squeeze their price-sensitive domestic lines, while their overseas emerging-market sales — a key growth engine — are also under pressure. These brands operate on thinner hardware margins than Huawei, leaving them with less room to maneuver. Lu described handset pricing as increasingly “hostage” to memory costs, an upward cycle he expects to last until at least late 2027, and possibly into 2028. That timeline puts enormous strain on smaller players. The choice to downgrade storage or use cheaper memory modules might offer short-term relief, but it risks alienating consumers who have grown accustomed to high-spec devices at aggressive price points. What casual observers miss is how this dynamic accelerates market consolidation. Huawei’s ability to hold prices steady — backed by its own chip design capabilities and a more diversified supply chain — gives it a structural advantage that smaller rivals cannot easily replicate. As memory costs climb, the weakest brands will either lose share or exit the market entirely. The survivors will be those that can absorb the pain longest, not those that shout loudest about value. The memory price cycle will not break until late 2027 at the earliest. Until then, every pricing decision in Shenzhen and Beijing will be a test of endurance.

Chinese smartphone makers are preparing for their most challenging year since the Covid-19 pandemic, as analysts say skyrocketing memory chip prices are forcing brands to make a difficult choice: absorb the higher costs, raise retail prices or downgrade sto...

Huawei’s pricing discipline will pressure smaller Chinese rivals already squeezed by memory costs, potentially accelerating market consolidation.

The development adds to a wider China semiconductors story in which companies are being judged on execution, capital access, regulatory fit and the credibility of their regional expansion plans.

For business readers, the important question is whether this becomes an isolated announcement or part of a more durable operating pattern across customers, financing channels, partners and public-market expectations.