Huawei says the memory-chip shortage has added roughly $200 to the cost of making a phone, according to a report from Finimize. That puts a number on a squeeze buyers have been paying for all year. It also explains why phone prices keep moving in one direction. This week brought a Galaxy S26 price increase in the US, and the industry is tracking toward a 27.6% rise across 2026.
What the $200 Looks Like on a Price Tag
Huawei has held its prices steadier than Xiaomi and Oppo, both of which have already raised theirs. Steadier is not the same as flat. The new Mate 90 Pro starts at CNY 7,000. That is CNY 1,000 more than the Mate 80 Pro in its 12GB/256GB configuration cost a year ago.
There is a less obvious problem underneath that. Memory accounts for a larger share of a cheap phone’s total cost than an expensive one’s. A $200 component increase is easier to absorb on a flagship with a four-figure price. On a budget handset the same increase is a much bigger slice of the bill. That is why the cheaper end of the market is where shoppers will feel this first and hardest.
Huawei’s own smartphone shipments are expected to grow about 8% this year. Some domestic rivals could see declines as steep as 34%. The split suggests who is able to ride out the cost increase and who is not.
Why This Gets Worse Before It Gets Better
The supply side of the story is not encouraging. Micron, one of the world’s largest memory makers, just reported an extraordinary year. Here is how the numbers landed, per the company’s FY2026 results.
- Q4 FY2026 revenue: $54.25 billion, up from $11.3 billion a year earlier
- Full-year revenue: $133.2 billion, against $37.4 billion the year before
- Full-year net income: up 895% to $85 billion
- Core datacenter gross margin: 90%, up from 41%
- Cloud and HBM memory gross margin: 83%, up from 59%
Those margins are the shortage, expressed as profit. Micron’s fattest numbers sit in its datacenter and cloud/HBM units, which is where AI demand is concentrated. And CEO Sanjay Mehrotra told investors on the earnings call that the imbalance has further to run:
In calendar 2027 as well as 2028, we see demand exceeding supply. In fact, we see greater tightness in the industry in 2027 and in 2028 versus 2026. Overall, supply-demand environment is only getting tighter.
Mehrotra went further on the same call. He said Micron cannot currently predict when the market will rebalance. That is a major supplier admitting it has no end date for the crunch.
What It Means If You’re Buying a Phone
The honest reading is that this is not a one-season price blip to wait out. Memory makers are earning their best margins from datacenter and HBM products, and the supplier guidance above points to 2027 and 2028 being tighter than 2026. Phone makers are competing for parts in that market, and they are passing the result on.
Practically, that means two things. The phone you are eyeing is unlikely to get cheaper through a mid-cycle price cut, so festival and seasonal sales matter more than usual. Paying up for extra storage or RAM at purchase also looks less like an upsell now. The same shortage will keep those configurations expensive on your next device too.
Sources: Finimize, The Register, GSMArena
