Xiaomi halts ultra-thin smartphone production as memory costs squeeze prices

Xiaomi’s halt of ultra-thin phone production and warning of flagship prices exceeding ¥10,000 isn’t just about memory costs—it signals that the economics of advanced packaging and high-density integration have hit a wall in consumer devices. Soaring DRAM/NAND prices, driven by U.S.-Japan-South Korea export controls and AI server demand, force OEMs into zero-sum trade-offs between thinness, battery life, and camera performance. Compliance risks are mounting: Chinese brands face potential U.S. restrictions on HBM while racing to qualify domestic LPDDR5X, inflating BOM costs and validation timelines. Competitively, Apple may leverage this to reinforce Pro-tier pricing power, while Oppo/Vivo pivot to mid-tier differentiation. Over the next 18 months, smartphones will enter an era of 'performance inflation'—where spec upgrades no longer drive volume but push up ASPs, accelerating market consolidation and squeezing out smaller players.