The global tech manufacturing industry is facing one of its toughest periods in recent years. A severe shortage of key components, especially memory chips, has started to disrupt production across the smartphone market. With companies shifting their focus and resources toward building massive AI data centers, flagship smartphones are feeling the pinch — and consumers are now seeing the impact in the form of rising prices.
Industry leaders warn that this trend isn’t temporary. As silicon becomes more expensive and supply pressures continue to mount, retail prices are expected to climb even higher in the coming year.
Xiaomi Says Smartphone Prices Will Get Costlier
During Xiaomi’s Q3 2025 earnings call, President Lu Weibing openly discussed the challenges manufacturers are dealing with. He pointed out that the surge in chip prices has become the biggest reason for today’s smartphone inflation.
A major part of the problem lies with top chipmakers like Samsung. According to reports, Samsung has started prioritizing the production of memory chips designed specifically for AI data centers. These DDR chips are crucial for handling and processing huge amounts of data in real time, and the growing demand has shifted manufacturing capacity away from traditional smartphone memory components.
That shift has caused supply to tighten dramatically. In fact, Samsung is said to have raised the prices of its smartphone memory chips by as much as 60 percent since September — a sharp jump driven by the AI boom.
What This Means for Smartphone Prices in 2025 and Beyond
The effects of the shortage are already visible across the industry. While companies continue preparing for upcoming launches — for example, the Realme 15 Lite 5G appearing on Amazon — the larger trend points to one outcome: higher prices for consumers.
Lu Weibing cautioned that the financial pressure manufacturers are feeling today will increase further in 2026. That means buyers should be prepared for smartphones to become noticeably more expensive.
This is already happening in major markets like India. Recent launches highlight the upward trend:
• The Oppo Find X9 debuted at Rs. 74,999, compared to the Find X8’s Rs. 69,999.
• The OnePlus 15 also arrived with a Rs. 3,000 increase over the previous model.
iQOO India CEO Nipun Marya echoed similar concerns in a conversation with Gadgets 360 about the upcoming iQOO 15. He explained that while companies can manage small cost increases of around 5 to 10 percent, no manufacturer can absorb a massive 60 percent rise in component costs. In such cases, price hikes become unavoidable.
What’s Next for the Industry
Even as the financial strain continues, the tech world isn’t slowing down. Big announcements are on the horizon, including Qualcomm’s much-awaited reveal of the Snapdragon 8 Gen 5, expected to power many premium smartphones next year.
On the services side, Apple has introduced new annual and monthly AppleCare+ plans in India, giving users more flexibility in how they protect their devices.
But despite these exciting updates, the underlying message remains the same: the economic reality for smartphone makers is challenging. As Xiaomi’s president emphasized, raising prices will help offset only part of the burden. The spike in manufacturing costs is simply too large for price adjustments alone to fix.
