Xiaomi's August Report Card Arrives With a Memory-Chip Hangover and an EV Tailwind

Xiaomi's EV hits record deliveries, but memory chip costs force price hikes and weigh on smartphone shipments ahead of Q2 earnings.

The countdown to Xiaomi's second-quarter earnings release on August 18 has turned into a study in contrasts. The company's electric-vehicle division keeps stacking record months, yet its smartphone business—still the core of the group—is wrestling with a memory-chip cost surge that has forced three rounds of price increases in under a year. Investors are left to weigh which force matters more.

That tension played out in Monday's session, when the stock slipped to €3.11, down 3.76% from Friday's close of €3.23. The pullback follows a 19.71% gain over the prior 30 days, leaving the shares roughly 16% below their 200-day moving average of €3.72. For technical analysts, the picture is clear: the longer-term downtrend remains intact even as short-term bounces keep occurring.

The Memory-Chip Squeeze Hits Where It Hurts

The immediate catalyst for the latest price adjustments is a supply crunch in memory components. IDC data shows memory-chip prices have climbed roughly 300% year over year, as DRAM and NAND producers shift capacity toward high-bandwidth memory for AI applications. Xiaomi began raising prices on eight to nine models in China on August 2, with increases of 300 to 500 yuan across the Xiaomi 17 series, Redmi K90, and Turbo 5. The Xiaomi 17 Pro Max now retails at 6,499 yuan, up 500 yuan, while the standard Xiaomi 17 has moved to 4,799 yuan. International markets are seeing hikes of $40 to $70 per device.

Xiaomi management has quantified the damage. Lu Weibing, a senior executive, put the added cost for a 12GB RAM/512GB storage configuration at 1,500 yuan and warned the trend could persist into 2027 or even 2028. The company is not alone in this predicament—OPPO, vivo, Apple, OnePlus, and Honor have all adjusted their pricing. Should the shortage intensify, some market observers suggest flagship models could eventually breach the 10,000 yuan threshold.

The price hikes land at an awkward moment. IDC data shows Xiaomi's global smartphone shipments fell 26.3% year over year to 31.2 million units in the second quarter, with market share slipping to roughly 11–12%. In China, the company dropped to fifth place with 8.2 million devices shipped, a decline of about 21%, against an overall Chinese market contraction of 4.3%. An insider report hints that Xiaomi may skip an Ultra variant of the upcoming 18 series to control costs, focusing instead on the Pro model.

The broader chip market offers little comfort. Smartphone chip sales shrank 15% in the first half, with Qualcomm and MediaTek both reporting delivery declines exceeding 25%, according to Counterpoint. Morgan Stanley, however, sees a silver lining: in a July 31 research note, the bank argued that sustained high memory prices could actually support Xiaomi's smartphone margins.

EV Momentum Builds, But Skeptics Remain

Against that backdrop, the automobile division continues to deliver. Xiaomi EV posted its fourth consecutive month of deliveries above 30,000 vehicles in July, bringing first-half volumes to 185,055 units—up 17.2% year over year. The YU7 SUV contributed 104,559 vehicles, while the SU7 sedan added 80,496 units, though that model lost nearly half its volume compared with the prior-year period.

Late July also brought the unveiling of the SkyNomad N90 Max and N70 Max, two extended-range electric vehicles priced at 299,900 and 259,900 yuan respectively—positioned below rivals such as the Li L8. Deutsche Bank sees potential for around 150,000 units of the series to sell this year.

Not everyone is convinced. JP Morgan struck a cautious tone in a Monday research note, questioning whether Xiaomi can hit its 2026 EV delivery target and seeing limited near-term catalysts for the stock. That skepticism likely contributed to the day's decline, as investors balanced the auto division's operational strength against the smartphone segment's cost pressures.

What to Watch Ahead of August 18

UBS, for its part, sees room for an upside surprise when Xiaomi reports second-quarter numbers. The market consensus currently sits at revenue of approximately 116.84 billion yuan and earnings per share of 0.225 yuan. The bank's Monday note highlights the possibility that Xiaomi could beat those estimates, with the EV division's delivery trajectory serving as a key indicator of operational momentum.

Two product developments will also bear watching. The Redmi K100 Pro launches in China on August 11, featuring the Snapdragon 8 Elite Gen 5 V-series chipset and a 185Hz OLED display. Meanwhile, Xiaomi has begun rolling out its July security update across 58 device models, addressing a critical camera autofocus bug on the Xiaomi 17 Ultra and battery indicator issues on the older Xiaomi 13. Early leaks suggest the upcoming HyperOS 4 will deepen AI integration under the HyperAI branding, with design cues borrowed from Apple's iOS ecosystem.

With 30-day annualized volatility above 57%, Xiaomi remains a stock for the risk-tolerant. The August 18 earnings date will test whether the EV story can outweigh a smartphone business caught between falling volumes and rising component costs—a balancing act that will define the company's near-term trajectory.