Xiaomi Slashes 2026 Phone Target by 40 Million Units as Memory Shortage Bites; Stock Still Down Nearly 38% Year-to-Date

Xiaomi slashes 2026 sales target by 30% to 95M units amid global memory chip crunch fueled by AI infrastructure demand, driving smartphone prices up 13% and shares down 38% YTD.

Xiaomi has dramatically scaled back its smartphone ambitions, cutting its 2026 sales forecast from 135 million units to roughly 95 million, as a global shortage of memory chips — driven by the insatiable demand for AI infrastructure — squeezes supply and pushes component costs sharply higher. The revision, communicated to suppliers in recent weeks, underscores how deeply the memory crunch is reshaping the competitive landscape for handset makers.

The cuts come after a sobering performance during China’s mid-year shopping festival, traditionally a bellwether for consumer appetite. According to Counterpoint Research, nationwide smartphone sales dropped 13% during the June promotional period, with Xiaomi’s own volumes plunging 24%. Only Huawei managed to eke out growth in that environment. The culprit: manufacturers slashed discounts and raised prices on both new and older models to pass along rising procurement costs.

At the heart of the problem lies a structural imbalance. Each advanced Nvidia AI processor consumes large quantities of low-power memory chips, and cloud providers have locked up much of the available capacity through long-term contracts. That leaves smartphone makers like Xiaomi scrambling for allocation. Gartner expects smartphone prices to rise roughly 13% across the industry in 2026, with tight supply and elevated memory costs persisting into late 2027.

The stock market has taken a grim view. Xiaomi shares closed around €2.81 on Wednesday, leaving them down roughly 38% since the start of the year. On a 12-month basis, the decline is even starker: more than 55%. A modest rally — the stock gained about 9% over the past seven trading days — has done little to change the narrative. The 52?week high of €6.51, set in September 2025, remains nearly 57% out of reach.

Technical indicators underscore the depth of the sell-off. At €2.81, the stock trades 7% below its 50?day moving average of €3.02, and a hefty 28% below the 200?day average of €3.92. The relative strength index sits at 53.3, a neutral reading that leaves room for interpretation: bulls see a potential base forming above the June 26 low of €2.34, while bears note that the stock has lost the valuation premium it once commanded despite a steady stream of product announcements. Thirty?day volatility of nearly 42% suggests sharp swings are likely to continue.

The company’s electric?vehicle operations offer a contrasting narrative. Xiaomi delivered more than 30,000 EVs for the third consecutive month in June, a demonstration of production discipline if not explosive growth. Management is also pursuing cost?efficiency through “Titan Alloy 2.0,” a recycled?aluminum alloy designed to cut unit costs in its Gigacasting process. Yet these advances have barely registered with investors. The smartphone business remains Xiaomi’s core profit engine, and until the memory bottleneck eases — or the company can show that operating scale translates into meaningful cash flow — the stock will struggle to escape the shadow of its own recent history.

Reining in the sales target to 95 million units is a painful but pragmatic move. Xiaomi is effectively prioritizing profitability over volume in a market where rising input costs leave little room for error. With analysts warning that component pressures will persist well into next year, the road back to the 200?day moving average looks long. The June low may offer a technical floor, but a fundamental turnaround will require more than a recycled alloy or a steady EV production line.