China's Xiaomi says surging memory chip prices push up smartphone costs

Xiaomi says soaring memory chip prices have pushed up smartphone production costs, as it promises to trim the price of its new Redmi K90 model following market disappointment

Chinese smartphone manufacturer Xiaomi on Friday said surging memory chip prices have raised the cost of making handsets, after pricing of its new Redmi K90 series drew market disappointment.

"Cost pressure has transferred to the pricing of our new products," President Lu Weibing wrote on Weibo. "Rising costs of memory chips are far beyond expectations and could intensify." Xiaomi launched its entry-level Redmi K90 on Thursday with the base model, equipped with 12 GB of memory and 256 GB of storage, priced from 2,599 yuan ($364). That compared with 2,499 yuan for the base model of predecessor K80 series launched in November 2024.

Lu noted consumer disappointment about price gaps between configurations. He said Xiaomi will lower the price of the most in-demand K90 model - with 12 GB memory and 512 GB storage - by 300 yuan to 2,899 yuan for the first month of sales.

A global rush for chips for use in artificial intelligence applications has tightened supply of conventional chips used in smartphones, personal computers and servers, sharply increasing their cost and boosting earnings for makers of NAND and DRAM such as South Korean duo Samsung Electronics and SK Hynix.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)