Smartphones Could Get Even More Expensive Next Year Amid Rising Component Costs, Xiaomi President Warns

Key smartphone components, such as memory chips, have recently been reported to be experiencing a drastic shortage as companies compete globally to build artificial intelligence (AI) data centres. Consequently, several flagship smartphones that offer AI-centric features have been heavily impacted, with their prices witnessing an uptick due to the rising chip costs. A Xiaomi official has now warned that its product retail prices could rise even further next year, although the price hike may not be enough to absorb the soaring manufacturing costs.

Xiaomi Phones to Get More Expensive

Soaring chip costs are driving up the smartphone prices, Xiaomi President Lu Weibing reportedly said during the Q3 2025 earnings call. This is attributed to chipmakers, such as Samsung, deprioritising the fabrication of smartphone memory chips in favour of DDR chips that are used to build AI data centres, temporarily storing data and facilitating rapid data transfer and retrieval.

As supply worsens, chip prices are seeing drastic increases. Samsung was recently reported to have hiked the cost of its smartphone memory chips by up to 60 percent compared to September, amid the intense demand for chip units designed specifically for AI tasks.

This, in turn, means a hike in smartphone prices. “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,” the Xiaomi official said.

It is especially evident in markets such as India, where recently flagship devices like the Oppo Find X9 series and OnePlus 15 have become more expensive compared to their predecessors. The Find X9 has been launched at a starting price of Rs. 74,999, compared to the Find X8's Rs. 69,999. The OnePlus 15, meanwhile, is also Rs. 3,000 more expensive than the OnePlus 13.

In a recent conversation with Gadgets 360, iQOO India CEO Nipun Marya talked about the anticipated pricing of the upcoming iQOO 15. Addressing the rumours of a price hike, the official said that “if raw material costs have increased, there is no alternative [to a price hike].”

Marya claimed that the company would have been able to digest the rising costs if the increase had been about 5 to 10 percent. However, “No company can exist doing that [absorbing a 60% hike]... It really means a lot for our industry,” the official added.

This was iterated by the Xiaomi President as well, who claimed that “Some of the pressure may have to be addressed through price hikes, but price increases alone won't be enough to digest it.”