China's Xiaomi says surging memory chip prices push up smartphone costs - The Economic Times
Xiaomi has announced that rising memory chip costs are driving up the prices of its smartphones, notably affecting the new Redmi K90 series. The base model, with 12 GB RAM and 256 GB storage, launched at 2,599 yuan, higher than the previous K80 series’ starting price of 2,499 yuan. Company President Lu Weibing acknowledged consumer dissatisfaction over price increases and confirmed that the most popular K90 variant with 12 GB RAM and 512 GB storage will receive a temporary 300 yuan discount during the first month of sales. The surge in chip prices is linked to a global demand spike for AI applications, which has constrained supply for standard smartphone, PC, and server chips. Major memory chip producers like Samsung and SK Hynix have benefited from this supply-demand imbalance. Xiaomi’s move reflects broader industry challenges as manufacturers navigate cost pressures while trying to maintain competitive pricing.
The Key points
- Xiaomi cites rising memory chip prices as the main reason for smartphone price hikes.
- Redmi K90 base model launched at 2,599 yuan, higher than K80 series.
- 12 GB RAM and 512 GB storage K90 variant gets a 300 yuan launch discount.
- Consumers express disappointment over pricing differences between models.
- Global demand for AI chips has tightened supply of conventional memory chips.
- Increased chip costs are affecting smartphones, PCs, and servers.
- Samsung Electronics and SK Hynix see boosted earnings from high chip prices.
- Xiaomi aims to balance cost pressures with competitive pricing strategies.
- Price adjustments reflect market sensitivity and consumer feedback.
- The scenario underscores global semiconductor supply challenges affecting electronics.
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