Smartphone manufacturers are facing a squeeze on memory costs as major vendors push back against Samsung's latest price increases. Vivo and Oppo have rejected the third-quarter DRAM hike, signaling that the supply chain crisis is intensifying rather than easing. This standoff matters because it highlights the tension between component makers trying to protect margins and device makers struggling with rising bills.
Manufacturers cut mobile memory output by 11% to prioritize AI data center chips
The conflict centers on Samsung Electronics, which is leading efforts to raise DRAM prices. However, the broader market is shifting as Samsung, SK Hynix, and Micron plan to cut smartphone DRAM and NAND production by up to 11 percent. These manufacturers are redirecting capacity toward high-margin data center products like HBM and server DRAM to meet surging demand from AI giants such as OpenAI and Google.
DRAM prices have risen due to this high demand from AI infrastructure projects. Memory manufacturers are prioritizing these server-grade components, which has caused shortages in the consumer segment. The production cuts for smartphones are a direct result of this strategic shift away from mobile memory chips.
Xiaomi has adjusted its 2026 smartphone production target to 110 million units, citing expected price drops for DRAM and NAND later this year. This adjustment follows a previous reduction from 170 million to 95 million units, showing the volatility in supply chain planning. The company expects to purchase memory at lower prices again before the end of the year.
We looked at the last DRAM update, where several of the same balance and stability themes came up. The current situation reflects a market in transition, with manufacturers balancing immediate cost pressures against long-term capacity allocations for AI workloads. This dynamic will likely continue to influence device pricing and availability in the coming quarters.
Source: NotebookCheck
