Benefiting from the explosive growth in global demand for AI computing power, the memory chip industry has entered a new "super cycle". Major memory suppliers, including Samsung Electronics and SK Hynix, have informed customers that they will continue to increase their quotations in the fourth quarter of this year. In response, Xiaomi President Lu Weibing issued a statement stating that intensifying cost pressure will push up mobile phone prices.

Affected by the surge in demand for AI and high-performance computing (HPC), according to analysis forecasts from Citigroup and Morgan Stanley, the average selling price of dynamic random access memory (DRAM) is expected to increase by 25% to 26% in the fourth quarter, indicating that the price increase craze is significantly intensifying. High-bandwidth memory (HBM) has become a key force driving price increases because it consumes more than three times the wafer capacity of standard DRAM.

Xiaomi recently released the entry-level Redmi K90. The basic model is equipped with 12GB of memory and 256GB of storage space. It is priced at RMB 2,599. The pricing of the new phone disappointed the market, resulting in poor sales. In response, Lu Weibing issued a statement stating that cost pressure has been transferred to the pricing of new products. The cost of memory chips has increased far beyond expectations and may further intensify.

Memory and storage manufacturer SanDisk announced in September this year that it would raise the price of flash memory (NAND Flash) by 10%, while Micron suspended DRAM and NAND quotations to re-evaluate the allocation after predicting shortages. This development trend may have an impact on consumer pricing, and the prices of various devices such as notebook computers and smartphones are expected to rise accordingly.

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

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