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The sharp rise in memory prices has driven record highs for dynamic random-access memory, NAND flash, and high-bandwidth memory, leading industry insiders to predict the first round of mobile phone price hikes in China this year, likely to take effect within the next week.
Several distributors shared that the starting prices for many upcoming models have increased by approximately CNY600 to CNY1,000 (around USD87 to USD146), with premium flagship devices potentially seeing increases of CNY2,000 to CNY3,000. These price adjustments will not be limited to new models; some older models are also expected to become more expensive. If memory costs stay high, further price increases across various models could occur throughout 2026.
A recent quarterly memory pricing report reveals that prices jumped between 80 to 90 percent in the first quarter of 2026 compared to the last quarter of 2025. DRAM, NAND, and high-bandwidth memory all reached historic highs, primarily driven by a significant surge in server DRAM prices. While NAND flash had remained relatively stable in the previous quarter, it still climbed 80 to 90 percent in the first quarter. Some high-performance HBM3e modules, an enhanced version of HBM3, also experienced further gains, indicating widespread price increases across all categories.
This unprecedented spike in memory costs is squeezing smartphone manufacturers’ profit margins, particularly for budget devices. Over the past decade, entry-level models priced around CNY1,000 expanded the market by offering high shipment volumes despite slim profit margins. With storage expenses remaining elevated, the profit margins for low-end devices are shrinking quickly, prompting some manufacturers to gradually phase out budget models while shifting their focus toward mid- and high-end smartphones, which could lead to increased industry consolidation.
Supply shortages of popular models, especially those with higher memory capacities, have already begun, and manufacturers are expected to prioritize configurations with higher profit margins, according to a distributor.
An industry insider noted, “The timing of when this focus on high-margin products will end depends on when investment in computing power slows down.” They added that if the pace of artificial intelligence-related capital spending decreases, the supply-demand balance for general-purpose memory might stabilize.
Recently, a major smartphone manufacturer announced it will pause new hardware research and development projects for domestic smartphones, citing stiff market competition and soaring memory costs. The company explained that despite efforts to sustain regular product updates amidst rising market pressures, the continued spike in memory prices has made it impossible to move forward with upcoming models’ commercialization.
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