Xiaomi Flagship Phones Rise Up to 500 Yuan Amid Storage Chip Cost Surge
Xiaomi has raised prices across its flagship smartphone lineup by 300 to 500 yuan, effective August 2, as the company grapples with the steepest storage chip price surge in years. The move, which took effect at midnight across Xiaomi’s official online store, immediately became a trending topic on Chinese social media platform Weibo, according to Sina Finance.
Third Round of Increases in 2026
The price adjustment marks Xiaomi’s third round of increases this year, with the latest round targeting its premium models. The Xiaomi 17 standard edition rose 500 yuan to 4,799 yuan, the Xiaomi 17 Pro increased 400 yuan to 5,399 yuan, and the Xiaomi 17 Pro Max jumped 500 yuan to 6,499 yuan. The REDMI Turbo 5 and K90 series each rose 300 yuan, as Beijing News reported.
“We received the price adjustment notice last night,” a Xiaomi store employee in Beijing told Securities Times. “This is Xiaomi’s third round of price increases this year. In previous years, before the Xiaomi 18 launch, existing flagships would typically be discounted to clear inventory. It’s very rare to see prices rise just before a product generation change.”
Storage Chip Costs Driving Industry-Wide Increases
The core driver behind the price surge is the unprecedented escalation in global storage chip prices. DRAM and NAND flash spot prices have risen over 300% cumulatively, according to TrendForce data cited in the 21st Century Business Herald. Same-version memory prices have surged nearly fourfold compared to the first quarter of 2025.
Xiaomi Group President Lu Weibing acknowledged the severity of the situation: “This round of memory price increases has far exceeded expectations. Same-version memory prices have surged nearly 4x compared to Q1 last year. The 12+512GB version rose about 1,500 yuan, and the 16+1TB version rose even more.”
Storage components have now become the single most expensive component in smartphones, rising from 10-15% of bill-of-materials (BOM) cost to over 25%, and approaching 60% for phones under $400, according to Counterpoint Research data shared via Sohu.
AI Demand Siphoning Consumer-Grade Supply
The deeper structural cause lies in the explosive growth of AI computing demand. AI data centers require massive amounts of high-bandwidth memory (HBM), prompting Samsung, SK Hynix, and Micron to shift over 70% of advanced production capacity to higher-margin HBM products, squeezing consumer-grade supply.
Pan Helin, a member of the MIIT Information and Communication Economic Expert Committee, explained: “The direct trigger for this round of price increases is the sharp rise in storage chip prices. New storage capacity takes about two years to build, and equipment supply bottlenecks extend this further. The deeper driver is that AI computing demand is siphoning capacity from top chip manufacturers, with production lines shifting toward server-grade high-end storage.”
Market Response and Consumer Impact
Following Xiaomi’s official price increase, market prices rose rapidly. On the Dewu app, the Xiaomi 17 Pro’s average market transaction price jumped from 4,750 yuan to 5,699 yuan in a single day, a roughly 20% increase, as reported by Sina Finance.
Xiaomi is not alone in this adjustment. OPPO, OnePlus, vivo, iQOO, Honor, and Samsung have all announced price increases in 2026, and Apple raised prices on some Mac and iPad products by up to $300 on June 25. Industry-wide, major phone manufacturers have suspended promotional discount activities due to cost pressures, according to ZOL.
Xiaomi’s smartphone gross margin has been steadily declining, from 14.6% in 2023 to 12.6% in 2024 and 10.9% in 2025, with Q4 2025 pressure bringing it down to 8.3%, as noted by International Finance News.
What’s Next
Lu Weibing has predicted that memory price increases will continue at least until the end of 2027, possibly extending into 2028. He also warned that some domestic flagship phones may break the 10,000 yuan price barrier by year-end.
Xiaomi founder Lei Jun has urged consumers to act now: “If you plan to change your phone within the next year, I strongly recommend you do it now.” The company has stated it aims to have the smallest price increases among competitors, even as it adjusts prices across its product lineup.
With storage chip supply constraints expected to persist and AI demand continuing to grow, consumers and industry watchers alike are bracing for further price adjustments across the smartphone market in the coming months.