Memory chip price surge makes budget smartphones unprofitable, analysts warn

A surge in memory chip prices has made it impossible for smartphone vendors to profitably manufacture handsets priced under US$100, according to analysts. The cost of memory for these devices is expected to rise 400% in Q3 2026, pushing the bill of materials for a typical configuration from US$14 to US$70, as reported by Omdia. Current memory prices already exceed the total bill of materials from a year ago, said Jusy Hong, senior research manager at Omdia. During a webinar on Friday, Hong stated that manufacturing smartphones below US$100 is currently and will remain impossible in the near future. Major vendors are expected to exit this money-losing segment despite strong consumer demand, pivoting instead to mid-range value-added products, which will drive up average retail prices. Hong noted that small local players might revive the ultra-low-price segment once memory prices stabilize in a year or two, but for now, this market is disappearing. The Vivo X200 series launched in Beijing on October 14, 2024, exemplifies the shift toward higher-priced models.