Xiaomi Faces Memory Chip Crisis as Prices Jump 90% in 2026

Key Takeaways

• At Mobile World Congress, Xiaomi unveiled the Xiaomi 17 and 17 Ultra with global pricing set at 999 euros and 1,499 euros
• First-quarter 2026 has seen memory chip costs skyrocket 80–90%, fueled by AI data center demand siphoning supply from mobile devices
• Market research firm IDC projects a 12.9% contraction in worldwide smartphone shipments for 2026 amid the component shortage
• Unlike Apple and Samsung, Xiaomi lacks sufficient premium market share to cushion the impact of escalating component costs
• Electric vehicle revenue jumped nearly 200% year-over-year in Xiaomi’s latest quarterly report, partially compensating for a 3% smartphone revenue decline

Xiaomi revealed its flagship Xiaomi 17 series to the international market this past Saturday during Mobile World Congress in Barcelona.

Pricing for the standard Xiaomi 17 begins at 999 euros ($1,179), while the premium 17 Ultra commands 1,499 euros. These price points match the previous generation exactly.

This decision to maintain pricing stability comes during turbulent market conditions. Data from Counterpoint Research indicates memory chip prices have climbed 80–90% during the first three months of 2026.

The dramatic price acceleration stems from constrained memory availability, as manufacturing capacity shifts toward AI-focused data centers. Mobile phone manufacturers are losing the bidding war for limited chip supplies.

Memory components represent among the costliest parts in contemporary smartphones. Industry analysts at Gartner anticipate smartphone retail prices could climb 13% industry-wide throughout 2026 as manufacturers pass costs to consumers.

IDC projects an even grimmer outlook, estimating global smartphone unit sales will contract by 12.9% this year as the component shortage ripples through the supply chain.

Xiaomi maintained stable flagship pricing, yet industry experts caution the company faces heightened vulnerability compared to market leaders. Apple and Samsung possess established premium customer bases capable of absorbing price increases. Xiaomi lacks this same cushion.

“This year will be even worse because Xiaomi does not have a very strong premium share which means that they cannot rely on the premium segment to offset low margins in other devices like Apple and Samsung can,” said Francisco Jeronimo, VP of data and analytics at IDC.

Xiaomi’s smartphone shipment volume predominantly consists of mid-tier products — precisely the segment analysts identify as most vulnerable if retail prices must increase.

Ben Wood, chief analyst at CCS Insight, indicated Xiaomi will probably need to implement price adjustments on budget and mid-range models eventually. The critical uncertainty is how long they can postpone such moves without eroding profit margins.

Electric Vehicle Division Provides Financial Cushion

Xiaomi’s automotive division has emerged as an increasingly vital revenue stabilizer. During the most recently reported quarter — the three months ending September 2025 — EV revenue exploded nearly 200% compared to the prior year.

During that identical period, smartphone sales declined 3% on a year-over-year basis. The electric vehicle segment now represents approximately one-quarter of consolidated company revenue.

Elliptic Labs Secures Additional Xiaomi Device Wins

In related developments, Norwegian artificial intelligence firm Elliptic Labs disclosed that its AI Virtual Smart Sensor Platform was integrated into five new Xiaomi and Transsion models launched during February 2026.

The software solution eliminates the need for physical proximity sensors, reducing bill-of-materials costs and enhancing power consumption efficiency. Elliptic Labs’ technology currently operates across over 500 million devices globally.

Despite these product integration successes, Elliptic Labs shares (EIP) have declined 45.51% year-to-date, with current market capitalization standing at NOK 389.6 million.

Xiaomi executives cautioned in November 2025 that the smartphone sector would likely face pricing pressure throughout 2026, a forecast that is now materializing in real time.