China's Xiaomi: A Surge In Memory Chip Prices Drives Mobile Production Costs To Rise

Redmi K90's new series price sparked market disappointment. (photo; x @chehonz201 ·)

JAKARTA - A smartphone manufacturer from China, Xiaomi, on Friday, October 24 said that the increase in the price of memory chips had increased the cost of making phones, after the price of the new series Redmi K90 sparked market disappointment.

"The cost pressure has impacted our new product price," wrote Xiaomi President Lu Weibing, on his official Weibo account. "The increase in memory chip costs far exceeds expectations and can continue to increase."

Xiaomi launched the Redmi K90 entry-level series on Thursday, October 23 with a basic model equipped with 12 GB of memory and 256 GB of storage, priced starting from 2,599 yuan (around Rp. 8.9 million).

In comparison, the basic model of its precursor series, K80, which was launched in November 2024, was sold for 2,499 yuan (approximately IDR 8.6 million).

Lu acknowledged the consumer's disappointment with price differences between variants. He said that Xiaomi would lower the price of the K90 variant which is most in demand with 12 GB of memory and 312 GB of storage by 300 yuan to 2,899 yuan (around Rp9.9 million) during the first month of sales.

The surge in demand for chips for artificial intelligence (AI) applications globally has tightened the supply of conventional chips used on smartphones, personal computers, and servers. This causes the price of the chip to increase sharply, as well as encourages profits for NAND and DRAM manufacturers, such as two South Korean giants, Samsung Electronics and SK Hynix.