Xiaomi President Warns Smartphone Prices Will Rise Sharply in 2026 Amid Soaring Component Costs

Smartphone components, like memory chips, are currently in short supply. This shortage is due to a global race among companies to develop artificial intelligence (AI) data centres. As a result, flagship smartphones with AI features are seeing price increases because of the rising cost of chips. A Xiaomi official has warned that their product prices might increase further next year, though this may not fully cover the escalating manufacturing costs.

During the Q3 2025 earnings call, Xiaomi President Lu Weibing highlighted that soaring chip costs are pushing smartphone prices up. Chipmakers such as Samsung are prioritising DDR chips for AI data centres over smartphone memory chips. These chips temporarily store data and enable quick data transfer and retrieval, leading to a shortage in smartphone memory chips.

Impact on Smartphone Prices

The scarcity of supply has led to significant price hikes for chips. Samsung recently increased its smartphone memory chip prices by up to 60 percent compared to September due to high demand for AI-specific chip units. This situation is causing an increase in smartphone prices globally.

“I expect pressure to be much heavier next year than this year,” said a Xiaomi official regarding the anticipated rise in retail prices. Consumers should prepare for notable price increases in products as a result of these developments.

Price Hikes in Indian Market

In India, flagship devices like the Oppo Find X9 series and OnePlus 15 have become pricier than previous models. The Find X9 starts at Rs. 74,999, while its predecessor was priced at Rs. 69,999. Similarly, the OnePlus 15 is Rs. 3,000 more expensive than the OnePlus 13.

Nipun Marya, CEO of iQOO India, discussed the expected pricing of the upcoming iQOO 15. Addressing rumours about price hikes, Marya stated that if raw material costs rise, increasing prices becomes unavoidable.

Industry Challenges

Marya mentioned that absorbing a cost increase of around 5 to 10 percent would have been manageable for companies. However, “No company can exist doing that [absorbing a 60% hike]… It really means a lot for our industry,” he added.

This sentiment was echoed by Xiaomi’s President who noted that “Some of the pressure may have to be addressed through price hikes, but price increases alone won’t be enough to digest it.”

The ongoing challenges with chip shortages and rising costs are impacting smartphone pricing significantly across markets worldwide. Companies are grappling with how best to manage these pressures while maintaining competitiveness and consumer satisfaction.