A surge in memory chip prices has started raising concerns across the smartphone industry. Xiaomi CEO Lei Jun recently addressed questions about whether this trend could affect smartphone prices. His comments shed light on the broader supply challenges affecting the consumer electronics sector.

Rising memory prices: The cause behind smartphones’ price hike

During a recent interaction with the media, Lei Jun explained that the rapid growth of artificial intelligence has significantly increased the demand for memory chips. According to him, this demand surge has created a shortage of supply in the past year, pushing memory prices sharply higher. The rising cost of memory components has placed noticeable pressure on Xiaomi’s smartphone business and other related product lines.

Lei Jun acknowledged that the cost situation is challenging for manufacturers, but he suggested that Xiaomi will attempt to manage these pressures carefully. Instead of directly passing the entire cost increase to consumers, the company plans to explore different approaches to reduce the burden on buyers. He indicated that Xiaomi will try various methods to make any price adjustments easier for customers to accept.

The spike in component costs is already affecting multiple companies across the consumer electronics sector. Some brands have reported profit declines due to the higher cost of components. Others have slowed down or reconsidered certain product plans as the rising prices make new launches more difficult to sustain.

Xiaomi executives have indicated that the company is in a relatively stable position compared to some competitors. Xiaomi President Lu Weibing previously stated that the company maintains close partnerships with the world’s major memory manufacturers. Because Xiaomi produces a wide range of products, including smartphones, tablets, televisions, and electric vehicles, its scale allows it to maintain stable supply relationships.

Lu Weibing also noted that the memory price cycle may last longer than previous ones. He expects the current price increase phase to continue until around the end of 2027. According to industry observers, some smartphone brands may increase prices in the coming months, with entry level devices potentially disappearing as manufacturers shift their focus towards higher value models.

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Xiaomi introduced its in-house XRING O1 mobile processor back in May last year. Seems like the company is now gearing up for its successor.

According to well-known leaker Digital Chat Station, Xiaomi will “definitely” launch a new XRING-branded chip this year, possibly called the XRING O2.

Like its predecessor, it is said to be manufactured using TSMC’s 3nm process. While the naming has not been officially confirmed, it is expected to be the direct successor to the O1.

Xiaomi plans to launch a new mobile processor every year moving forward

The XRING O1 is Xiaomi’s first self-developed flagship SoC, built on TSMC’s second-generation 3-nanometer process. The chip later debuted inside the Xiaomi 15S Pro, where it delivered competitive benchmark scores and solid real-world performance.

In a recent interview with CNBC, Xiaomi Group President Lu Weibing said the company plans to release a brand-new self-developed mobile phone processor every year going forward.

Outside of companies like Apple and Samsung, most Android phone makers rely heavily on chip suppliers such as Qualcomm and MediaTek. Xiaomi’s entry into that small club signals a longer-term strategic shift that will give the brand greater control over its products.

However, Xiaomi’s chip ambitions are not limited to smartphones. The company is reportedly planning to expand the use of its next-generation silicon across a wider range of smart devices within its ecosystem. This could include tablets, wearables, and other connected hardware.

When Xiaomi first launched the O1, it positioned the chip as a foundational step. Founder Lei Jun previously said that self-developed chips typically require three to four years of research and development.

He explained that the first generation was more about validating the underlying technology than chasing large shipment volumes, and pre-order quantities were intentionally limited.

On paper, however, the O1 was no small experiment. Built on Arm-based CPU and GPU architectures, it achieved a multi-core benchmark score above 9,000, placing it among top-tier flagship chips. For a first attempt, that was enough to draw attention.

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(Source | Via)