Strategic Analysis Report of Terminal Manufacturers Amid the Memory Chip Price Hike Cycle

Now I will conduct an in-depth analysis based on the collected data and present a complete investment research report to you.

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The current memory chip market is experiencing the most drastic price uptrend cycle since 2010. According to the latest forecast from Citigroup, the average selling price (ASP) of DRAM will rise by 88% in 2026, while that of NAND flash will increase by 74%; among them, the price of server DRAM is expected to surge 144% year-on-year, and the price of enterprise-grade SSD will rise by 87%[1][2]. The root cause of this round of price hikes is the structural explosion of artificial intelligence demand — the huge demand for High Bandwidth Memory (HBM) from AI servers has led major chip manufacturers to tilt their production lines towards advanced chips, severely crowding out the production capacity of traditional DRAM and NAND, and the supply-demand imbalance is becoming increasingly acute[1].

From specific price data, since September 2025, the cumulative spot price increase of DRAM and NAND has exceeded 300%. The 12GB LPDDR5X (mobile DRAM commonly used in smartphones) has soared from about USD 33 at the beginning of the year to over USD 70 by the end of November, a whopping increase of 230%; the 6GB LPDDR4X commonly used in mid-to-low-end models saw a quarter-on-quarter increase of 40.3% in the fourth quarter, meaning the price at the end of the year rose by nearly 80% compared to the end of June[3][4]. In the PC market, the price of 16GB DDR4 memory modules has risen from over RMB 100 to over RMB 400, while DDR5 64GB has jumped from around RMB 1,000 to about RMB 5,600[4].

The price hike of memory chips has triggered a chain reaction in the terminal market. Samsung Electronics’ operating profit in the fourth quarter of 2025 reached KRW 20 trillion (approx. USD 13.82 billion), a year-on-year increase of 208%, setting a new record for the company’s highest quarterly profit; Citigroup predicts that its operating profit will soar to KRW 155 trillion in 2026, a year-on-year surge of 253%[5][2].

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Global major PC manufacturers including Lenovo, Dell, and HP have collectively issued warnings to customers, confirming that they will be forced to raise prices by 15% to 20% to cope with cost pressures[1][6]. According to IDC analysis, storage (SSD+NAND) accounts for 15%-20% of the bill of materials (BOM) cost of laptops. With double-digit price increases, the cost pressure on the downstream PC market will become prominent in 2026[6]. Specifically, the cost of a mainstream laptop may increase by nearly RMB 1,000, and the increase for some high-end models will be even more staggering.

In terms of specific implementation, the strategies of various manufacturers show differentiated characteristics. Zheng Xiaoming, CFO of Lenovo Group, stated that the company has increased the inventory level of key components by 50% compared to usual, and has adopted multiple methods such as contracts, futures, and long-term supply contracts to ensure sufficient memory supply[6][7]. Lenovo CEO Yang Yuanqing clearly responded: “Lenovo will maintain competitive costs, and is confident in maintaining gross profit and net profit, but will also have a mature mechanism to adjust prices.”[6] In contrast, Jeff Clarke, COO of Dell, bluntly said “I have never seen memory chip costs rise so fast”, and is considering raising prices of server and PC products by at least 15%-20%; HP’s CEO also stated that the second half of 2026 may be “especially difficult”, and will adjust product prices if necessary[6][8].

This round of price hikes is accelerating the brand concentration process in the PC market. IDC predicts that global PC shipments will decline by 4.9% in 2026, and if the supply situation further deteriorates, the decline may expand[6][8]. The market presents a complex situation of “volume decline, price increase”, and the gap between giants and small and medium-sized brands will further widen.

From the perspective of competitive landscape, leading manufacturers with scale advantages and long-term procurement agreements are expected to seize more market share from small and medium-sized regional brands and white-label manufacturers. Lenovo Group’s PC business accounts for 25.5% of the global market share, while HP’s is 19.8%; these two enterprises are most likely to have the bargaining power to negotiate with memory giants such as Samsung and SK Hynix[6]. According to supply chain sources, in response to memory chip price hikes, executives of a global leading PC manufacturer have recently visited Samsung Electronics, SK Hynix, and Micron intensively, and have initially reached supply guarantee agreements[6].

For small and medium-sized PC manufacturers, the problem is more severe. They are facing the dilemma of “can’t get goods even with money”: current mainstream memory manufacturers give priority to ensuring orders from long-term major customers, while orders from small and medium-sized customers are either delayed or forced to accept higher prices and more unstable delivery cycles[6][8]. This extreme manifestation of the “Matthew Effect” means that the right to speak will increasingly concentrate in the hands of a few giants.

Despite cost pressures, large PC manufacturers are still expected to maintain relatively healthy profitability by virtue of their supply chain advantages. Take Lenovo as an example, it hedges against cost increase risks through advanced inventory preparation and locking in long-term agreements, coupled with the scale effect brought by its 25% global market share in PC business, it is expected to strike a balance between price hikes and market share expansion[7]. However, the overall industry profit margin will face pressure — IDC pointed out that memory shortages may lead to “price increases, profit declines, or, in the worst case, reduction of memory capacity in new systems”[1].

From the market perspective, government and enterprise procurement driven by policies and rigid demand from digital transformation, as well as the production tool market such as high-end content creation, will show strong resilience; while the mass consumer market will obviously be under pressure due to price sensitivity[8]. In the next two to three years, with the gradual expansion of HBM production capacity and the successive commissioning of new factories, part of the production capacity pressure is expected to be alleviated, and the tight supply situation of consumer-grade hardware will tend to ease.

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Since October 2025, the prices of new models released by manufacturers such as Xiaomi, OPPO, vivo, and Honor have increased by RMB 100-600 compared to their previous generations[4][9]. Specifically, the starting price of the Redmi K90 series has increased by RMB 100-300 compared to the previous generation; the starting price of iQOO 15 is RMB 4,199, an increase of RMB 200 from the previous generation; the starting price of vivo X300 is RMB 4,399, an increase of RMB 100 from the previous generation; the starting price of OPPO Find X9 is RMB 4,399, an increase of RMB 200 from the previous generation[4]. The starting price of Xiaomi 17 Ultra has been raised by RMB 500 compared to the previous generation[5].

Lu Weibing, President of Xiaomi, frankly said: “The cost pressure from the upstream is truly transmitted to the pricing of our new products. The price hike of memory is indeed very severe, not only far exceeding expectations in terms of magnitude, but will also continue to rise in the future.”[4] Li Jie, President of OnePlus China, also admitted: “The price hike of memory is indeed very severe, not only far exceeding expectations in terms of magnitude, but will also continue to rise in the future.”[4]

According to calculations by TrendForce, compared with the first quarter of 2025, the price hike of storage has increased the overall BOM cost of smartphones by 8%-12% in the fourth quarter[3][4]. As an important component of smartphone hardware, storage accounts for 10%-20% of the total BOM cost, of which high-end flagship models account for about 10%-15%, and mid-range models account for 15%-20%[3].

This round of price hikes is reshaping the smartphone market pattern. According to Counterpoint Research data, the proportion of memory in the BOM of iPhone 17 Pro Max has exceeded 10%, a significant increase from 8% of the 2020 iPhone 12 Pro Max; for flagship models equipped with high-end memory, the memory cost may account for more than 20% of the BOM[5].

The market pattern differentiation is mainly reflected in the following three levels:

Although Apple and Samsung are under pressure, they have structural hedging advantages — sufficient cash reserves and long-term supply agreements allow them to lock in memory supply 12-24 months in advance. It is reported that the long-term supply agreement (LTA) for DRAM chips signed by Apple with Samsung and SK Hynix is about to expire, and Apple’s executive team has booked long-term hotel accommodation for key renewal negotiations, aiming to lock in a new three-year long-term agreement with suppliers[1].

Except for Huawei, the hardware gross profit margin of mainstream domestic smartphone brands is between 10% and 20%, and the net profit margin is often within 10%. Therefore, the cost of mid-to-low-end products is already very optimized, and it is difficult to hedge through cost reduction of other components; some models have already seen negative gross profit[3][4].

IDC predicts that China’s smartphone shipments will decline by 2.2% year-on-year to 278 million units in 2026; in a moderate downside scenario, the decline may expand to 5.2%, and the price hike may be higher[3]. Many analysts believe that the increase in terminal prices will directly raise consumers’ replacement threshold, further lengthen the replacement cycle, and may push some consumers’ demand to the second-hand market[4].

Facing cost pressures, smartphone manufacturers are adopting diversified response strategies:

1. Specification and Configuration Adjustments
   : New flagship models in 2026 may not upgrade memory configurations, and the price reduction range of old models may also be narrowed[3]. Some manufacturers may be forced to reduce the memory configuration of new models to control costs, but this will weaken product competitiveness.

2. Product Line Contraction
   : As LPDDR4 inventory is exhausted, it will gradually withdraw from the mainstream market, and the entire industry will upgrade to LPDDR5/LPDDR5X, accelerating the move towards high-end[4].

3. Channel Strategy Adjustments
   : Manufacturers may re-examine channel profit margins, reduce reliance on price-sensitive channels, and shift to higher-margin offline channels and high-end user groups.

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Domestic smartphone brands (except Huawei) generally focus on cost-effective positioning, with already meager profit margins. According to industry data, the hardware gross profit margin of mainstream domestic smartphone brands is between 10% and 20%, and the net profit margin is often within 10%[3][4]. As an important part of the smartphone BOM cost (accounting for 10%-20%), the skyrocketing price of storage directly erodes the already limited profit space.

Specifically, mid-to-low-end models are most affected by memory price hikes — these models usually adopt cost-sensitive memory solutions such as LPDDR4X, and the quarter-on-quarter increases of related products in the fourth and third quarters of 2025 reached 40.3% and 27.6% respectively[4]. For domestic smartphone brands whose shipments are mainly mid-to-low-end models, this means that the pressure on the overall cost structure is far greater than that of Apple and Samsung, which are positioned high-end.

Compared with giants such as Apple and Lenovo that have scale advantages and long-term agreements, domestic smartphone brands are in a relatively weak position in negotiations with memory chip suppliers. Supply chain sources point out that current mainstream memory manufacturers give priority to ensuring orders from long-term major customers, while orders from small and medium-sized customers are either delayed or forced to accept higher prices and more unstable delivery cycles[6].

The cost of 12GB LPDDR5X memory chips currently purchased by Apple has reached USD 70 per piece, and its executive team still went to South Korea in person to negotiate renewal[1]; while domestic smartphone brands may face the dilemma of “can’t get goods even with money”, and it is difficult to obtain the same price and supply guarantee.

The trend of “high-end configuration for the masses” over the past decade is reversing. To cope with cost pressures, manufacturers may have to raise prices significantly, reduce the memory configuration of new models, or both[3]. This may cause the efforts of domestic smartphone brands to break into the high-end market to be frustrated — either forced to raise prices and lose cost-effective advantages, or reduce configurations and sacrifice product competitiveness.

While global memory giants focus on high-end and shift production capacity strategies to AI-related products, a historic opportunity window is opening for Chinese memory manufacturers. Smartphone brands such as Transsion, Xiaomi, OPPO, and vivo have tried to use domestic memory chips in new models; PC manufacturers such as Lenovo and Huawei have also equipped new products with SSDs from Yangtze Memory Technologies (YMTC) and DRAMs from ChangXin Memory Technologies (CXMT)[3].

YMTC has broken through 192-layer and above stacking technology. Its 232-layer TLC NAND chip adopts an innovative double-layer stacking architecture to achieve an equivalent density of 294 layers, with an interface rate of up to 3600MT/s, a stable yield rate of 95.2%, and has been mass-produced and shipped to global customers[10][11]. The next-generation 300-layer stacking technology is also in the research and development stage.

CXMT released a number of high-end DRAM products in November 2025, including DDR5 with a speed of 8000Mbps and LPDDR5X with a speed of 10667Mbps, as well as a complete series of memory modules. The key performance indicators have fully caught up with international first-tier manufacturers such as Samsung and Micron[10][11]. CXMT expects to increase its monthly DRAM production capacity to 300,000 wafers by the end of 2025, a year-on-year increase of nearly 50%[10].

According to Omdia data, calculated based on sales, ChangXin Memory Technologies’ global DRAM market share has increased to 3.97% in the second quarter of 2025, and is expected to further grow[12]. YMTC’s global NAND market share has reached 5%[10]. Industry insiders revealed that benefiting from the rapid growth of enterprises such as CXMT, China’s overall share in the global DRAM market is expected to double year-on-year to 10% in 2025[10].

CXMT’s revenue from January to September 2025 increased by 97.79% year-on-year, and its revenue in the third quarter increased by 148.8% year-on-year, with a comprehensive gross profit margin rising to 35%; it is expected that the full-year revenue in 2025 will reach RMB 55-58 billion, and the net profit will reach RMB 2-3.5 billion[12]. This marks that domestic memory chips are moving from “usable” to “mainstream”.

Although domestic memory chip enterprises are facing a market window of opportunity, their development is still constrained by “bottlenecks” in key equipment and materials[10]:

1. Equipment Restrictions
   : Key EUV equipment cannot enter the Chinese market due to US export controls; etching machines and thin film deposition equipment from Tokyo Electron of Japan and Lam Research of the US are also in short supply.

2. Material Bottlenecks
   : The localization rate of core raw materials such as high-end photoresists from JSR and Shin-Etsu, and ALD precursors from Merck of Germany is still less than 30%, and there is still a significant gap in purity, consistency, and stability compared with international advanced levels.

3. Yield Gap
   : The average yield rate of domestic DDR5 particles is about 65%, while international leaders such as Samsung have stabilized at more than 85%. This means that with the same wafer input, nearly 40% of the wafer cost of domestic manufacturers is directly wasted, resulting in a significant cost disadvantage[10].

4. HBM Technical Threshold
   : The more advanced HBM technology involves complex processes such as 3D stacking, TSV through-silicon vias, and efficient heat dissipation. Currently, there is no mass production capacity in China. The industry generally expects that the monopoly pattern of the three giants Samsung, SK Hynix, and Micron will be difficult to break before 2027[10].

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Segment	Benefit Level	Core Logic
Memory chip manufacturers (Samsung, SK Hynix, Micron)	★★★★★	Skyrocketing prices + supply shortage, record-high profitability
Large PC manufacturers (Lenovo, HP, Dell)	★★★☆☆	Supply chain advantages allow cost pass-through + market share capture
High-end smartphone brands (Apple, Samsung)	★★★☆☆	Long-term contract guarantees + brand premium capability
Small and medium-sized PC/smartphone manufacturers	★☆☆☆☆	Disadvantaged in supply chain, facing survival pressure
Domestic memory chips (Yangtze Memory Technologies, ChangXin Memory Technologies)	★★★★☆	Market share growth + accelerated technological breakthroughs

1. Memory Price Trend
   : Citigroup and Nomura have diverging forecasts for the 2026 DRAM price increase (88% vs 46%), and continuous tracking of actual contract prices is required for verification.

2. HBM Production Capacity Expansion Progress
   : When the new HBM production capacity of SK Hynix, Samsung, and Micron is put into operation will determine whether the tight supply of consumer-grade memory can be alleviated.

3. Yield Improvement of Domestic Memory
   : Whether CXMT’s DDR5 yield can increase from 65% to more than 80% will determine whether it can truly enter the mainstream market.

4. Terminal Demand Elasticity
   : The replacement cycle has extended from 24 months in 2020 to 33 months in 2025, and the inhibitory effect of price hikes on demand needs to be closely observed.

In the medium to long term, this round of memory chip price hikes has created a rare strategic window for domestic manufacturers:

• Short-term (2026)
  : Domestic memory manufacturers are expected to gain more share in mature process products (DDR4, LPDDR4X, etc.), as the supply of these products is tight due to the production transfer of international manufacturers.

• Medium-term (2027-2028)
  : With the expansion of CXMT’s Wuhan Third Plant (planned monthly production capacity of 150,000 wafers) and YMTC’s production capacity, the global market share of domestic manufacturers is expected to reach 15%-20%.

• Long-term (2029 and beyond)
  : If domestic HBM technology achieves a breakthrough, it will truly enter the high-end market and compete comprehensively with international giants.

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The memory chip “super cycle” is being transmitted layer by layer through the supply chain, reshaping the product logic and pricing strategies of the two core consumer electronics markets: PC and smartphone. For PC manufacturers, a collective price hike of 15%-20% is a foregone conclusion, and the market will present a pattern of “giants remain dominant, white-label players exit”; for smartphone manufacturers, a price increase of RMB 100-600 coupled with configuration adjustments will accelerate market differentiation.

Domestic smartphone brands are facing severe challenges in this round of cost transmission: particularly prominent cost pressure, relatively weak supply chain bargaining power, and hindered high-endization process. However, the technological breakthroughs and production capacity expansion of domestic memory chips also provide them with a strategic opportunity for “domestic substitution” — with the rapid catch-up of enterprises such as YMTC and CXMT in technical indicators and production capacity scale, domestic smartphone brands are expected to hedge against the risk of international memory chip price hikes by adopting local supply chains.

The current supply-demand imbalance of memory chips is expected to last until the end of 2026 or even 2027[1][2]. All parties in the industrial chain need to prepare for long-term responses. For investors, they should focus on the performance elasticity of leading memory chip enterprises, changes in market share of large PC/smartphone manufacturers, and investment opportunities in the process of domestic substitution.

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[1] Gelonghui - “Up to 70%! Two Memory Giants Fire the ‘First Shot of Price Hikes’ in 2026” (https://www.163.com/dy/article/KIJBN0CS05198ETO.html)

[2] Wall Street CN - “Memory Chip Prices Out of Control! Wall Street Revises Forecasts Again: DRAM May Surge 88% in 2026” (https://wallstreetcn.com/articles/3762731)

[3] Sohu - “AI Devours Global Memory, Smartphones Forced to Raise Prices, Can Domestic Memory Break Through?” (https://m.sohu.com/a/973152264_128075)

[4] China.com - “Smartphone Price Hike Cycle Arrives, Cost Pressure Transmitted” (https://news.china.com/socialgd/10000169/20251210/49060843.html)

[5] EDN China - “Samsung’s Profit Soars 208%, Memory Prices May Rise Another 50%… Global Memory”