In-Depth Analysis of the Impact of Memory Chip Price Hikes on the Smartphone Industry and Huawei's Competitive Position

Based on the data and analysis I have collected, I will provide you with a

.

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The current global memory chip market is experiencing the

, with the momentum far outpacing the previous two cycles [1][2]:

Product Type	Early 2024 Price	Late 2025 Price	Increase	Comparison with 15-Year Historical High
4GB DRAM	~US$15	~US$48	+220%	15-year high (previous high was ~US$20) [2]
16GB DRAM	~US$25	~US$65	+160%	Far exceeds historical levels
64GB NAND	~US$8	~US$15	+87.5%	Continuing to rise
256GB NAND	~US$22	~US$48	+118%	Tight supply and demand

According to Counterpoint Research forecasts,

, with an estimated additional 20% increase in Q2 [2].

1. AI Server Demand Surge
   : OpenAI’s “Stargate” project is expected to require 900,000 DRAM wafers per month [1]. Cloud providers have locked in production capacity in advance, and HBM (High Bandwidth Memory) has a gross profit margin of over 70%, prompting memory chip manufacturers to shift consumer electronics production capacity to AI servers.

2. Smartphone Configuration Upgrades
   : After completing storage capacity upgrades in 2025, the iPhone is expected to undergo another upgrade in 2026, continuing to drive demand.

3. Supply-Side Bottlenecks
   : The expansion cycle for memory chip production is 18-24 months. Even if new production capacity construction starts in H2 2025, effective supply will not be formed until 2027 [2].

Source: DRAMeXchange, Global Semiconductor Observer [1]

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A UBS research report points out that

[1]:

Time Node	Memory Share in Flagship Models	Memory Share in Mid-Range & Entry-Level Models	Unit Cost of Flagship Models	Incremental Unit Cost of Mid-Range & Entry-Level Models
Q4 2024	8%	22%	$52	$16
Q4 2025	11%	27%	$52→$58	$16→$22
Q4 2026 (Estimated)	14%	34%	$52→ $73	$16→ $32

• The increase in memory costs for flagship models (+41%) accounts for only about
  2%
  of the selling price, which is relatively manageable [1]
• The increase in memory costs for mid-range and entry-level models (+37%) accounts for about
  6%
  of the selling price, with a disproportionately large impact [1]

Affected by memory chip price hikes,

[3][4]:

Manufacturer	Downgrade Magnitude	Affected Models	Reason
Xiaomi	Over 20%	Mid-range, entry-level, and overseas models	Cost pressure cannot be passed on
OPPO	Over 20%	Mid-range and entry-level product lines	Limited memory supply
vivo	Nearly 15%	Core product lines	Compressed profit margins
Transsion	Below 70 million units	Entry-level models	Costs cannot be covered by 1,000-yuan (~US$139) models

TrendForce has further downgraded its forecast for 2026 smartphone production volume from a

[3].

“We haven’t seen a market like this in over a decade… Amid the memory chip shortage, we predict the smartphone market will enter a phase of ‘survival of the fittest’.” [2]
—— Sales Director of a memory chip manufacturer

• The cost of smartphones priced around 1,000 yuan has reached
  US$90-100
  , making it difficult to cover costs [2]
• Memory chip manufacturers prioritize
  Tier 1 customers
  (Apple, Samsung, Huawei), leaving non-headline manufacturers facing supply shortages
• The industry is shifting from
  scale expansion to value competition
  , with small and medium-sized manufacturers being eliminated at an accelerated pace

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According to IDC data,

[5][6]:

Indicator	2023	2024	2025	Trend
China Market Share	12%	13.5%	16.4%	Continued growth
Premium Market Share (US$600+)	21.4%	30.7%	34.4%	Approaching Apple
Global Shipment Volume	—	—	46 million units	+28.6% (fastest growth rate)
Global Ranking	—	9th	8th	Up 1 spot

• Apple’s market share in the US$600+ segment fell from
  61.8% in 2023 to 51.1% in 2024
  , and further dropped to
  48% in 2025
  [5]
• Huawei climbed from 21.4% to
  34.4%
  , breaking Apple’s monopoly [5]

Huawei’s counter-cycle advantage stems from

[5][7]:

Components	2020	2023	2025	Supplier Changes
Localization Rate	19%	32%	60%	Increased by 41 percentage points
Memory Chips	0%	5%	Yangtze Memory Technologies (YMTC)/ChangXin Memory Technologies (CXMT)	Fully replaced imports
Displays	20%	40%	BOE	Primary supplier
Main Chips	0%	Kirin 9000S	Kirin 9020	7nm equivalent breakthrough
Components from Japan, US, and South Korea	70%	55%	<40%	Decreased by over 30 percentage points

• Huawei has completed the replacement development of
  over 13,000 components
  and the board replacement development of
  4,000 circuit boards
  [5]
• In 2025, R&D expenditure reached
  RMB 180 billion
  , with R&D investment ratio increasing from 14%-15% to
  22%-23%
  [5]

Against the backdrop of a widespread 10%-20% price increase in the industry driven by memory chip hikes,

[8]:

Product	Pricing Strategy	Pricing Changes	Competitive Advantage
Mate 80 Series	Direct price cut of RMB 800	Starting at RMB 4,699	The only Kirin + HarmonyOS offering in the same price range
Pura Series	Price reduction under discussion	To be determined	Controllable costs
nova Series	Maintain competitiveness	RMB 2,000-4,000	Full range coverage

• Manufacturers such as Xiaomi and OPPO are forced to
  reduce entry-level models and raise prices
• Huawei, however, can maintain
  relatively stable production capacity and costs
  , forming differentiated competitiveness

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Indicator	2025	2026 Forecast	Change
Global Shipment Volume	1.26 billion units	~1.15 billion units	-3% to -4%
China Market Share (US$600+)	—	35.9%	+5.4 percentage points
China Market Share (Under US$200)	—	20.0%	-4.3 percentage points

Tier	Representative Manufacturers	2026 Outlook	Strategic Choices
Tier 1	Apple, Samsung, Huawei	Relatively stable	Protect profits, seize market share
Tier 2	Xiaomi, OPPO, vivo	Under pressure	Downsize entry-level segment, focus on premium segment
Tier 3	Transsion, Honor	Differentiated	Deepen regional presence or seek breakthroughs
Others	Small and medium-sized brands	Accelerated elimination	Facing survival crisis

1. Sustained Cost Advantage
   : Localization rate has reached 60%, enhancing immunity to international memory chip price hikes
2. HarmonyOS Ecological Expansion
   : HarmonyOS devices exceeded 32 million in 2025, with over 10 million developers and 350,000 applications [5]
3. Accelerated Technological Breakthroughs
   : Kirin 9020 performance improved by 35%, with in-depth optimization of HarmonyOS [8]
4. Rising Brand Momentum
   : The Mate 60 Series sold nearly 10 million units, establishing a domestic premium brand image

1. Chip Process Bottleneck
   : The 7nm equivalent process still lags behind international advanced levels
2. Uncertainties in International Supply Chain
   : US chip export restrictions on China may escalate
3. AI Smartphone Competition
   : Manufacturers such as Apple and vivo are accelerating the deployment of on-device AI
4. Production Capacity Ramp-Up
   : Domestic memory chip production capacity still requires time to expand

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1. Far-Reaching Impact of Memory Chip Price Hikes
   : 2026 will be the “year of smartphone price increases”, with the mid-range and entry-level market under severe pressure, and the industry entering a phase of “survival of the fittest”

2. Huawei’s Localization Advantage Stands Out
   : The 60% localization rate has given it a dual moat of
   cost advantage + strategic independence
   amid the supply chain crisis

3. Accelerated Differentiation of Competitive Landscape
   :
   • Premium Market
     : The “duel between Huawei and Apple” will continue to intensify
   • Mid-Range & Entry-Level Market
     : Price wars are fading, with cost-performance competition giving way to brand and ecosystem competition

4. Huawei’s Market Share Expansion is Expected
   : Driven by three factors—cost advantages, brand momentum, and technological breakthroughs—
   Huawei’s China market share is expected to exceed 20% in 2026

Investment Theme	Related Targets	Rationale
Memory Chip Price Hikes	Samsung, SK Hynix, Micron	Tight supply and demand continue, with both volume and price rising
Accelerated Domestic Substitution	Yangtze Memory Technologies (YMTC), ChangXin Memory Technologies (CXMT), GigaDevice	Market window opens, with market share increasing
Huawei Supply Chain	BOE, Goodix, Will Semiconductor	Domestic substitution dividends are being released
Reshaping of Smartphone Landscape	Focus on investment opportunities in the Huawei industry chain	The pattern of “the strong get stronger” is established

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[1] Sina Finance - “Epic Surge in Memory Chip Prices Makes 2026 the Year of Smartphone Price Hikes” (https://finance.sina.com.cn/roll/2025-12-29/doc-inhemysr0273695.shtml)

[2] 21st Century Business Herald - “Memory Chip Prices Continue to Soar, Smartphone Industry Enters Phase of Survival of the Fittest” (https://www.21jingji.com/article/20260114/b23ec4dac61e6afa13551abca9d21340.html)

[3] IT Home - “Xiaomi, OPPO, vivo, Transsion Said to Have Downgraded 2026 Full-Year Smartphone Shipment Forecasts” (https://www.ithome.com/0/913/900.htm)

[4] Jiemian News - Reports on Adjustments to Smartphone Manufacturers’ Shipment Targets Amid Memory Chip Price Hikes

[5] NetEhao - Chief Brand Review - “Huawei Phones Return to the Top Spot” (https://www.163.com/dy/article/KJBOJIS3051980LO.html)

[6] IDC - “Global Quarterly Smartphone Tracker” (January 14, 2026)

[7] Ennews - “Huawei Phone Localization Rate Exceeds 60%” (https://m.ennews.com/news-119964.html)

[8] OFweek Electronics Engineering Network - “Price Revolution Amid Memory Chip Surge: Huawei’s Counter-Cycle Price Cuts Reshape the Smartphone Industry Landscape” (https://tele.ofweek.com/2025-12/ART-8320511-8120-30677389.html)

[9] AJ Securities Research Report - “Memory Chip Price Hikes Will Continue Into 2026” (December 22, 2025)