Xiaomi's September Tightrope: A Foldable Flagship, Quadrupled Memory Costs, and an Auto Unit Still Bleeding Red

Xiaomi raises phone prices amid memory chip surge, while EV losses and recall weigh on stock down 54% from high.

The arithmetic facing Xiaomi investors this autumn is unforgiving. On one side sits a smartphone and AIoT core that generated 84 billion yuan in revenue at a healthy 20 percent gross margin during the second quarter. On the other stands an electric-vehicle and AI division that burned through 2.6 billion yuan in operating losses over the same stretch. Wedged between the two is a memory-chip price surge that has quadrupled component costs year-on-year, forcing the company to raise handset prices in China even as it prepares for one of the most crowded product-launch windows in recent memory.

Xiaomi's president, Lu Weibing, has been unusually candid about the strain, confirming that storage expenses in the first quarter of 2026 were nearly four times their year-earlier level and warning that further price adjustments could follow. The company moved on that front today, lifting prices on several models — including the Mi-17 series and Redmi K90 — by anywhere from several hundred to over a thousand yuan, in lockstep with Huawei and Honor. Analysts tracking TrendForce data see the pressure continuing: DRAM contract prices are projected to climb another 13 to 18 percent in the third quarter, following an industry revenue surge of roughly 81 percent in Q1. The AI boom has been diverting fab capacity toward high-bandwidth memory, leaving conventional DRAM and NAND scarce — a structural constraint, not a passing blip, for a company that has built its model on razor-thin per-unit margins.

A Flagship Built to Fight Back

Rather than simply absorbing the cost shock, Xiaomi is countering with technology. The Xiaomi 18 Fold, set to launch on September 8, pairs the company's in-house Xring O3 chip — a 3-nanometer design fabricated by TSMC with 24 billion transistors and an AnTuTu score north of five million — with the first commercial use of CXMT's new LPDDR6 memory. The Chinese memory maker began mass production in late August, and Xiaomi claims the chips deliver 113.8 GB/s of bandwidth, roughly 48 percent ahead of the previous generation. The Xring O3 is already in volume production, according to the company, while successor chips, the Xring O100 and D100, have completed development and are slated for deployment in 2027.

The strategy is clear: innovate out of the cost trap rather than compete purely on price. But the pricing math is uncomfortable. Reports put the Xiaomi 18's starting price at 5,499 yuan — a thousand yuan above its predecessor — and the Fold variant is entering a battlefield that could hardly be more crowded. Huawei unveils its triple-folding Mate XT2 and Pura X View on September 7, Apple is expected to counter with a foldable iPhone around September 10 at a rumored starting price near 15,000 yuan, and OPPO plus another Huawei Mate model are slated to follow within the month. Unconfirmed sales targets for the Xiaomi 18 Fold of 200,000 to 300,000 units suggest even the company's internal expectations are tempered by the competitive density.

The EV Albatross

The auto segment, meanwhile, continues to weigh on the broader narrative. Beyond the 2.6 billion yuan operating loss, a recall wave sweeping China's electric-vehicle industry has ensnared roughly 390,000 Xiaomi vehicles, adding fresh costs to a division that has yet to demonstrate a credible path to profitability. The company is also gearing up for the September launch of the Foldable 18 Fold, for which memory maker CXMT is reportedly supplying LPDDR6 chips — a plan Xiaomi has confirmed — as it leans further into domestic supply-chain independence.

What the Chart Says

The share price tells the story of a market that has already made up its mind. At roughly 3.02 to 3.04 euros, the stock sits about 54 percent below its 52-week high of 6.54 euros, reached last September, and remains around 15 percent under its 200-day moving average. The year-to-date decline stands at approximately 30 percent, extending to 51 percent on a twelve-month view. The muted reaction to the Xring O3 unveiling — a 0.6 percent gain since the announcement — suggests investors are unconvinced that silicon breakthroughs alone can offset the drag from the vehicle business.

The central tension is this: raising prices to defend margins is rational when storage costs have quadrupled, but executing those increases in a month when Apple, Huawei, and OPPO are all launching flagship hardware risks ceding market share at precisely the wrong moment. Xiaomi's technological commitments — the homegrown chip, the cutting-edge memory standard, the push toward supply-chain autonomy — argue for long-term competitiveness. Near-term, though, the interplay of cost inflation and product-flood competition leaves the stock exposed to continued volatility until the market sees whether consumers will actually absorb the higher price tags.