Huawei warns rising memory costs may force smartphone price hikes

Richard Yu, Chairman of Huawei's Consumer Business Unit, warned on August 5 that surging memory chip prices could force widespread smartphone price increases across the industry. Speaking at Huawei's August 2026 New Product Launch Event, Yu said that continuing to sell devices at current prices would mean selling at a loss.huaweicentral+1

"Due to the high price of memory, mobile phones may have to increase in cost on a large scale in the future; otherwise, they will be sold at a loss," Yu said during the event.huaweicentral

Memory Market Under Pressure

Yu attributed the crisis to booming AI growth consuming memory chip production capacity, with only three dominant players in the global DRAM market creating supply constraints for mid- and small-scale manufacturers. Industry stock for memory components has reached its limits, and the transition from DDR4 to DDR5 has further disrupted the market.huaweicentral

The warning comes as the bill of materials for Huawei's Pura 90 series has already risen by approximately CNY 1,000 to CNY 1,500 per unit due to memory cost increases, according to a report from finance.biggo.com. Huawei had already announced price adjustments in July after acknowledging immense cost pressure on its Pura 90 lineup.finance.biggo+1

CXMT Rejects Apple's Price Cut Demand

In a related development, Chinese memory manufacturer CXMT has rejected Apple's request for lower LPDDR5X memory prices, according to a report first published by Korean outlet Digital Daily. Apple had been negotiating supply prices for its upcoming 2026 iPhone, but CXMT quoted prices at or above those charged by Samsung and SK hynix ↘ 4.97%.wccftech+1

Strong demand from domestic Chinese brands gave CXMT the leverage to refuse. Huawei, Xiaomi, and other manufacturers had already locked in CXMT memory output in advance through high-priced contracts, leaving little incentive for the Chinese chipmaker to offer Apple a discount.huaweicentral+1

Broader Industry Implications

The dynamics have also benefited Korean suppliers Samsung and SK hynix, which can now focus on higher-margin HBM chips for AI data centers rather than competing on commodity DRAM pricing. An industry official told Digital Daily that CXMT is effectively controlling the price floor of the commodity DRAM market.wccftech

The memory crunch arrives amid political complications for Apple, which has faced pushback from bipartisan U.S. senators urging the company to abandon plans to source chips from CXMT, with a response deadline of August 21.macrumors