Asian Markets Retreat as Xiaomi Warns of Rising Phone Costs From Memory Chip Shortage

Asian equity markets closed mixed on November 19, 2025, with technology stocks pulling major indices lower. According to CNBC, Japan's Nikkei 225 fell 0.57 percent as semiconductor testing equipment maker Advantest dropped more than 4 percent before recovering. Semiconductor firm Renesas ended the session down 3.02 percent. South Korea's Kospi index retreated 0.61 percent to 3,929.51, with Samsung Electronics and SK Hynix declining 1.33 percent and 1.4 percent respectively.

Hong Kong's Hang Seng Index declined 0.33 percent while mainland China's CSI 300 rose 0.44 percent. The divergence came as Chinese tech company Xiaomi saw its Hong Kong-listed shares plunge more than 4 percent. The company warned investors on Tuesday that smartphone prices would rise in 2026 due to memory chip costs increasing from AI demand.

Consumer Electronics Face Cost Pressures

The warning from Xiaomi matters because it represents the first major consumer electronics manufacturer to publicly alert customers about price increases. Memory chips account for a portion of total production costs for smartphones and computers. Rising component prices force manufacturers to choose between absorbing losses or passing costs to consumers. CNBC reported that chipmakers and analysts warn of a memory chip shortage affecting consumer electronics and automotive industries. Companies prioritize AI server demand rather than consumer products.

Samsung Electronics quietly raised prices on select memory chips by as much as 60 percent compared to September, according to the report. TrendForce predicted that the memory industry entered a robust upward pricing cycle. This could force downstream brands to increase retail prices, adding pressure on the consumer market. Tech-focused market intelligence firm TrendForce forecasted increased price and demand pressures for consumer products including smartphones and notebooks.

Semiconductor Supply Chain Under Strain

The memory shortage stems from manufacturers redirecting production capacity toward high-bandwidth memory chips for AI accelerators. Traditional DRAM and NAND flash production decreased as companies chase higher margins from AI-related products. BNN Bloomberg reported that Nvidia's recent decision to use LPDDR memory chips in AI servers could cause server-memory prices to double by late 2026. The graphics chip maker switched to low-power memory normally found in phones and tablets to reduce AI server power costs.

Because each AI server needs more memory chips than a handset, the change created sudden demand that the industry cannot handle, according to Counterpoint Research. Memory suppliers including Samsung, SK Hynix and Micron already face shortages of older dynamic random-access memory products. The companies reduced production to focus on high-bandwidth memory necessary for advanced accelerators powering the AI boom. Asian semiconductor manufacturers control 71 percent of global semiconductor gross output. This concentration creates supply chain vulnerabilities when demand patterns shift rapidly between consumer and enterprise markets.

Further Reading

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