(Yicai) March 2 -- Soaring memory prices have pushed dynamic random-access memory, NAND, and high bandwidth memory to record highs, triggering what industry sources say will be the first wave of mobile phone price increases in China this year, with hikes likely to take effect within a week.

Several distributors told Yicai that the starting prices of many upcoming models have been raised by CNY600 to CNY1,000 (USD87 to USD146), while mid- to high-end flagship devices may see increases of CNY2,000 to CNY3,000. The adjustments will not be limited to new releases, with some older models also set to rise. If memory prices remain elevated, the market could see multiple rounds of price increases in 2026, they added.

According to the February Memory Price Tracker report released by Counterpoint, memory prices surged 80 percent to 90 percent in the first quarter of 2026 from the fourth quarter of 2025, with DRAM, NAND, and HBM all hitting historic highs. The main driver was a sharp increase in general server DRAM prices. NAND flash, which was relatively stable in the fourth quarter, also climbed 80 percent to 90 percent in the first quarter, while some HBM3e, an enhanced version of HBM3 products, posted further gains, indicating broad-based price acceleration across categories.

The historic spike in memory costs is putting pressure on smartphone makers’ margins, especially in the budget segment. Over the past decade, entry-level models priced around CNY1,000 supported market expansion through high shipment volumes despite low gross margins. With storage costs remaining high, profit space for low-end devices is rapidly shrinking, and some products in the budget segment may gradually exit the market as manufacturers shift their focus toward mid- to high-end models, potentially increasing industry concentration.

Supply of popular models, particularly high-memory versions, has already tightened, and manufacturers will prioritize configurations with higher profit margins, a distributor said.

One executive at a handset maker said, “When it [focus on high-margin products] will end depends on when investment in computing power cools down.” If the pace of artificial intelligence-related capital expenditure slows, the supply-demand balance for general-purpose memory may ease, the same source added.

Meizu recently said it will suspend new hardware research and development projects for domestic smartphones, citing fierce competition and surging memory prices. The company said that although it has strived to maintain normal product iterations despite intensifying market pressures, the continued spike in memory costs has made the commercialization of upcoming models “impossible.”

Editor: Emmi Laine