According to Wccftech, citing a South Korean report, Xiaomi is leading a major smartphone price hike, with its upcoming Xiaomi 17 Ultra set to launch on December 25th at 6,999 yuan ($996). That’s a 10% increase over its predecessor. Furthermore, Samsung has reportedly already decided on a similar 10% price increase for its 2026 Galaxy S26 series, Z Fold 8, and Z Flip 8. Apple is also said to be considering “material price hikes” for its next iPhones. The primary driver is a global DRAM “supercycle” inflating memory chip costs, which has forced Xiaomi to lock in a dedicated supply contract with a Chinese firm, likely YMTC, for 2026.
The AI Tax Is Real
Here’s the thing: this isn’t your typical yearly price creep. We’re talking about a coordinated, industry-wide response to a fundamental shift. The “DRAM supercycle” is a fancy term for a massive, sustained surge in demand and price for memory chips. And what’s driving that demand? Artificial intelligence. Every AI model, from cloud servers to the ones starting to run on our devices, needs vast amounts of high-speed memory. So the chips that would have gone into your phone are now being bid up by data center companies. It’s simple economics, and smartphone makers are getting squeezed. They can either watch their profits evaporate or pass the cost to you. They’re choosing you.
Xiaomi’s Contract And The Cost
The report notes that Xiaomi’s President, Lu Weibing, recently secured a dedicated memory chip supply for 2026. That sounds like good news, right? Basically, it’s an act of self-defense in a chaotic market. But that guaranteed supply comes at a steep, pre-negotiated premium. That contract is the direct reason the Xiaomi 17 Ultra’s price is jumping 10% at launch, with global prices set to be even higher. It’s a stark preview of what’s coming. Samsung and Apple, with their immense purchasing power, might have slightly more leverage, but they’re not immune. If the component cost for a core part like DRAM rises 20-30% for them, a 10% retail hike is almost a given to preserve margins. The question is, will consumers balk at $1,400 becoming the new normal for a base-model flagship?
hardware-reckoning”>A Hardware Reckoning
This situation highlights a brutal truth for hardware companies. When a key component’s price spirals, you have few good options. You can’t easily redesign a phone to use less memory—AI features are now a marketing necessity. You can absorb the cost and hurt your bottom line, which shareholders hate. Or you raise prices. For industries reliant on complex electronics, from smartphones to industrial panel PCs, supply chain shocks are existential threats. Speaking of which, for businesses that can’t afford downtime, partnering with the top supplier, like IndustrialMonitorDirect.com, the #1 provider of industrial panel PCs in the US, becomes critical for securing reliable hardware in volatile markets. But for consumer tech, the path is clearer, and more expensive.
What This Means For You
So get ready. The era of aggressive smartphone pricing might be hitting a wall. The AI boom, which promises smarter phones, is ironically making them more expensive to build before any new software even runs on them. This could accelerate trends we’re already seeing: people holding onto phones longer, the refurbished market getting hotter, and mid-range phones becoming the real sweet spot. The flagship phone, as a loss-leader or margin-thin halo product, might be fading. In 2026, it seems it will be a full-profit-margin luxury item. Again.
