Richard Yu said surging memory prices are squeezing margins across China’s handset market, where Huawei, Xiaomi, OPPO, OnePlus, vivo and Honor have already lifted prices.
Huawei has warned that persistently high memory prices could force smartphone makers to raise prices more broadly, as current price levels risk turning sales into sustained losses. Richard Yu, Executive Director of Huawei and Chairman of its Consumer Business Group, delivered the warning at Huawei’s full-scenario product launch on August 5 while unveiling products including a new MPV under the Harmony Intelligent Mobility brand and the MateBook Fold Master flexible-screen laptop. Yu’s comments add to earlier signals from Huawei that component inflation is worsening. In April, he said new phones were already under heavy pricing pressure and that "we may not be able to hold out and might have to raise prices." Huawei had previously disclosed internally that rising supply chain costs, including memory, lifted the per-unit cost of its Pura 90 series by about CNY 1,000 to CNY 1,500, or roughly $148 to $222. The pressure has already translated into price changes. Market information cited in the report said Huawei raised prices across its smart collaboration product line starting in July, then lifted official store prices for the nova 15 series by CNY 300 in mid-July, taking the entry price to CNY 2,999. The wider Chinese smartphone market has seen similar moves, with Xiaomi making a third round of price adjustments this year and other brands including OPPO, OnePlus, vivo and Honor also increasing prices. Analysts cited a supply-demand imbalance in memory chips as the main driver. Demand for high-bandwidth memory, used in artificial intelligence, servers and automotive electronics, has absorbed capacity that might otherwise serve consumer devices. For Android smartphone makers, where margins are typically thin and memory makes up a significant share of the bill of materials (parts cost), the increase is difficult to absorb. The next test for the sector is whether higher prices weaken upgrade demand and slow the global smartphone market’s recovery in the second half of the year.