Xiaomi revealed how much extra it pays for memory. The amount will take your breath away

It has been discussed for a long time that global investments in AI data centers are draining the memory chip market. Now, for the first time, we have concrete figures directly from one of the largest smartphone manufacturers. Xiaomi President Lu Weibing revealed on the Chinese social network Weibo how much the company is currently paying extra for memory – and these are amounts for which you could buy an entire cheaper phone.

Memory at the price of a cheaper phone

According to Weibeng, Xiaomi pays 1,500 yuan (approx. 4,700 CZK) more for a combination of 12 GB RAM and 512GB storage than in the first quarter of last year. This is not the total price – it’s just the surcharge compared to the situation a year ago. When we convert that, last year Xiaomi paid roughly 1,600 CZK for the same package, while today it’s around 6,300 CZK. An almost fourfold increase in twelve months.

The culprit is primarily the enormous demand for memory modules from AI data centers, which are buying up the capacities of chip manufacturers and driving prices up across the entire industry. Smartphone manufacturers are thus competing for the same resources as tech giants building infrastructure for large language models and other AI systems.

Xiaomi raises prices, but covers most of the costs itself

The company is responding to the situation with initial price adjustments. From April 11, the Redmi K90 Pro Max model will be more expensive in China by 200 yuan (just under 700 CZK), and ongoing promotions for the Redmi Turbo 5 and Turbo 5 Max models will be canceled. However, if you compare the price increase with the actual rise in costs, it is evident that Xiaomi is absorbing most of the difference from its own margins. For the Redmi series, where margins are traditionally the lowest, this is not sustainable in the long term.

So far, the changes exclusively concern the Chinese market. In European markets, including the Czech one, there have been no price increases yet. However, if memory prices continue to rise at the current pace, it’s more a question of when, rather than if, the higher costs will be reflected in phone prices here. And Xiaomi will certainly not be alone in this – practically all Android smartphone manufacturers are facing the same problem.

Are you willing to pay more for a phone due to more expensive memory?

Source: GSMArena