Xiaomi has released its financial results for the third quarter, revealing strong performance but also issuing a major industry warning.
According to the company, global smartphone prices are expected to rise significantly in 2026 due to increasing memory chip costs driven by the ongoing AI boom.
The rapid expansion of artificial intelligence technologies has created a massive surge in demand for high-performance memory. As a result, major memory manufacturers—including Samsung—are shifting their production focus away from smartphones and toward data centers, where AI-related hardware generates higher profits.
This shift has tightened memory supply for mobile devices, pushing prices upward and placing additional pressure on smartphone makers.
Xiaomi President Lu Weibing addressed the issue directly, noting that the cost environment will worsen next year. “I expect pressure to be much heavier next year than this year. Overall, consumers are likely to see a sizeable rise in product retail prices. Some of the pressure may have to be addressed through price hikes, but price increases alone won’t be enough to digest it,” he explained.
This outlook suggests that the upward trend in smartphone pricing will not slow down in 2026. Instead, flagship and mid-range devices alike may become noticeably more expensive as manufacturers struggle to absorb rising component costs. Lu’s comments also highlight that even with price adjustments, companies will still face profitability challenges unless the supply-demand balance for memory improves.
The warning comes at a time when consumers are already experiencing significant price jumps across the smartphone market. Flagship devices from major brands have seen consistent increases over the last few years, largely due to advancements in chipsets, camera systems, and battery technology. Adding memory-driven cost spikes to the mix could make next year’s smartphones among the most expensive yet.
While Xiaomi hopes the situation stabilizes, industry analysts agree that AI-driven demand will keep memory markets tight through 2025 and into 2026. If these predictions hold true, consumers should prepare for another round of price hikes across the smartphone industry.
For now, Xiaomi’s forecast serves as a clear signal: the global shift toward AI is reshaping more than just technology—it’s reshaping the prices of the devices we use every day.