Chinese smartphone manufacturer Xiaomi has announced pricing adjustments for its recently launched Redmi K90 series, citing the impact of surging memory chip costs. The company’s President, Lu Weibing, noted on social media platform Weibo that “the rising costs of memory chips are far beyond expectations and could intensify,” attributing higher smartphone prices directly to unexpected cost pressures.

Memory Chip Shortages Drive Production Costs

Xiaomi’s announcement reflects a broader global trend: memory chips, including NAND and DRAM, have seen price spikes due to accelerated demand from artificial intelligence applications, cloud computing, and consumer electronics. The shortage has affected supply chains across the smartphone and PC industries, forcing manufacturers to adjust retail pricing.

“Memory chip prices have increased significantly in recent months,” Lu explained, highlighting that the company must navigate rising component costs while maintaining competitiveness. The K90 series, Xiaomi’s flagship mid-range smartphone line, incorporates advanced memory configurations, which have become especially costly amid global supply constraints.

Major semiconductor manufacturers, including Samsung Electronics and SK Hynix, have reported higher earnings due to increased demand for memory components. While this benefits suppliers, it places pressure on device makers like Xiaomi to balance affordability for consumers with sustainable profit margins.

Redmi K90 Pricing Adjustments

The entry-level Redmi K90 is now priced at ¥2,599 ($364), a modest increase from the previous K80 model’s ¥2,499 launch price. Consumer feedback highlighted dissatisfaction over the pricing gap between different configurations, particularly the higher-end 12GB RAM / 512GB storage model.

In response, Xiaomi introduced a temporary ¥300 price reduction for the first month of sales on the most popular variant, aiming to ease concerns and maintain demand. Lu Weibing emphasized that the company remains committed to delivering high-performance smartphones while managing the unavoidable effects of component cost inflation.

Forward-Looking Strategy

Looking ahead, Xiaomi faces the ongoing challenge of rising component costs amid a volatile memory chip market. The company is exploring cost-optimization strategies and supply chain adjustments to mitigate the impact on future product launches. Analysts suggest that Xiaomi’s approach—balancing competitive pricing with technological innovation—will be key to sustaining market share both in China and internationally.

As AI-driven demand continues to drive chip prices higher, Xiaomi’s adjustments signal a proactive effort to maintain consumer trust while navigating an evolving production landscape.