Huawei says the memory chip shortage just added $200 to every phone it makes

Huawei consumer business chief Richard Yu told reporters in Shenzhen that memory component costs have added roughly $200 to the cost of building each smartphone the company makes. "We'll have to raise prices going forward, though it will be moderate," he said, adding plainly that the cost pressure "is hurting our profitability very badly."

Why it matters: $200 added to a device's build cost is a substantial jump for any phone maker to absorb quietly. Yu saying it out loud, in those terms, signals Huawei has decided it can't keep eating the cost without passing at least some of it on to buyers.

No. Apple, Xiaomi, and Huawei have all raised device pricing in September 2026, as the same component cost pressure hits the industry broadly.

Why it matters: when three major phone makers with very different business models and customer bases all raise prices around the same month, citing the same underlying cause, it's a strong sign this isn't a company-specific issue but a shared supply problem the entire industry is navigating at once.

Background: memory makers including Micron, Samsung, and SK Hynix have shifted a large share of their manufacturing capacity toward high-bandwidth memory (HBM), the specialized chips used in AI data center accelerators. HBM carries far higher profit margins than the ordinary memory that goes into phones and PCs.

In real life it's like a bakery deciding wedding cakes pay so much better than everyday bread that they quietly stop baking bread, and suddenly everyone's grocery store shelf is empty.

Why it matters: this same dynamic has already been driving up RAM prices for PC builders and pushing graphics card prices well above their list prices throughout 2026. Smartphones are simply the latest, and most widely felt, place that pressure has landed.

By the numbers: Huawei's net income fell 36% in the first half of 2026. Part of that decline came from the company deliberately stockpiling raw materials earlier in the year, a move meant to cushion the impact of rising costs rather than pass them straight to customers immediately.

Why it matters: stockpiling only buys time. It doesn't solve the underlying shortage, and Yu's comments suggest that strategy has reached its limits, forcing the company toward price increases it had been trying to avoid.

Yu argued the memory crunch could actually help Huawei competitively, saying it will squeeze budget smartphone brands harder than premium ones. "Demand for low-end products will be further compressed, forcing everyone to move to the mid- and high-end segment, which is what Huawei excels at," he said.

Why it matters: cheaper phones typically run on thinner margins to begin with, so a flat $200 memory cost increase eats a much bigger share of a budget phone's price than a premium flagship's. If Yu is right, the shortage could end up reshaping which phones people buy, not just what they pay for them.

Huawei unveiled its Mate 90 series this week, including the standard Mate 90, Mate 90 Pro, Mate 90 Pro Max, and two special editions, powered by the company's own Kirin 9050 Pro chip. The top Mate 90 Pro Max configuration starts at roughly 9,999 yuan, about $1,491.

Why it matters: launching a new flagship lineup in the same week as warning about price hikes isn't a coincidence of timing so much as a company setting expectations for buyers before the next round of increases lands.

Background: Micron's CEO recently said the memory shortage behind all of this is expected to persist through calendar 2027 and into 2028, with the company saying it has "no line of sight" to when supply and demand will return to balance.

Why it matters: that timeline suggests the pressure driving Huawei's price increases isn't a short-term blip phone buyers can simply wait out. It's a structural supply shift tied to how aggressively the industry is building out AI infrastructure, and there's no clear end date attached to it yet.

Background: the Mate 90 Pro Max's Kirin 9050 Pro chip is built using a technique Huawei calls "LogicFolding," and the company says it delivers more than a 40% performance improvement over its predecessor. Huawei has leaned on homegrown chip design since US export restrictions cut off its access to the most advanced chipmaking technology from foreign suppliers years ago.

Why it matters: that history adds a layer most of Huawei's rivals don't have to navigate. Apple and Xiaomi are raising prices purely because of a global memory shortage; Huawei is managing that same shortage on top of years of built-in constraints on which chip suppliers and manufacturing processes it can use at all, making its cost pressures somewhat harder to escape than competitors facing the memory crunch alone.

By the numbers: the memory shortage has already pushed some DDR5 RAM kit prices up well over 100% during 2026, and high-end graphics cards have seen memory costs account for more than 80% of their total component bill. PC maker Dell raised prices on memory-heavy configurations earlier in the year, and laptop makers have reported memory now making up a much larger share of total device costs than just months earlier.

Why it matters: smartphones joining that list isn't a surprise so much as a confirmation. The same memory chips that go into a gaming PC or a laptop also go into a phone, so once a shortage is severe enough to reshape pricing in one device category, it was always likely to eventually reach every category that depends on the same supply chain.

• If you're planning to buy a new phone soon, prices across most major brands are trending upward, not just at Huawei, driven by a shared component cost problem rather than one company's decision.
• Budget phones may be hit hardest, according to Huawei's own reasoning, since a flat cost increase eats a bigger share of a cheaper device's price.
• This is the same shortage already affecting PC and graphics card prices, so anyone shopping across multiple device categories this year is likely to see costs rise in more than one place.
• Don't expect quick relief. Industry forecasts for the underlying memory shortage point toward 2027 and 2028, not a resolution in the next few months.