Xiaomi’s Autumn Squeeze: Chip Price Hikes Threaten Margins as SUV Launch Offers a Fresh Growth Lane
Published on 07/27/2026 at 07:32 | Redaktion boerse-global.de
Xiaomi enters a pivotal second half of 2026 navigating a starkly divided corporate narrative. On one side, the company is rolling out its first multi-passenger electric vehicles, aiming to replicate the early success of the SU7 sedan. On the other, its core smartphone business faces a sudden cost shock just weeks before the flagship Xiaomi 18 series is due to hit the market.
Qualcomm has confirmed it will raise prices on its Snapdragon processors by a double-digit percentage from September 1. The move, driven by rising supplier costs and capacity constraints at TSMC, lands directly on Xiaomi’s upcoming flagship generation. Bloomberg reports that the new Snapdragon 8 Elite Gen 6 Pro could exceed $300 per unit, a figure tied to the expense of TSMC’s 2-nanometer manufacturing process, ongoing DRAM shortages, and a broader smartphone demand slowdown. Qualcomm is expected to unveil the chips at its Snapdragon Summit on September 22, just days before Xiaomi plans to launch the 18 series.
The timing is particularly awkward. Xiaomi’s September launch window coincides with the release of Apple’s iPhone 18, Huawei’s Mate 90, the Vivo X500, and the Oppo Find X10. Huawei deliberately moved its Mate series forward to land in the same period, intensifying a competitive landscape that will pressure manufacturers to keep prices aggressive even as component costs climb. The budget segment feels the pinch most acutely: memory components now account for roughly 60% of production costs for smartphones priced under €350, up from about a third last year. Analysts at Omdia forecast a 22% revenue decline in that tier — a market where Xiaomi’s Redmi and POCO brands are heavily exposed.
A Dual-Business Balancing Act
While the smartphone division braces for margin compression, Xiaomi’s automotive arm is accelerating. CEO Lei Jun has scheduled a technology event for July 30 to unveil the SkyNomad N90 Max and N70 Max SUVs, the company’s first move beyond the SU7 sedan into multi-passenger vehicles. The N90 Max, built on the Kunlun platform, uses a range-extender powertrain: a 1.5-liter turbo engine from Harbin Dongan generating 112 kilowatts acts as a generator for a 76-kilowatt-hour battery. Total range exceeds 1,000 kilometers, with pure electric range landing between 370 and 505 kilometers depending on the testing standard. The smaller N70 measures just under 4,960 millimeters in length and is configured as a five-seat all-wheel-drive model.
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Xiaomi is positioning both vehicles as mobile living spaces rather than conventional family SUVs. The cabin concept includes front seats that slide and rotate up to 360 degrees, a walk-through center console, and a fold-out roof tent paired with an integrated power station from partner EcoFlow. The company says the models underwent 626 days of testing involving 566 vehicles and more than 4.28 million kilometers of driving.
Xiaomi has set a delivery target of 550,000 vehicles for the full year. In the first half of 2026, it delivered 185,055 units, meaning the new SUVs will need to provide significant lift in the second half to close the gap.
Software Upgrades and AI Spending
Away from the hardware headlines, Xiaomi continues to refine its software ecosystem. Security patches for July 2026 have been rolled out to 58 devices across the Xiaomi, Redmi, and POCO brands, while support has been dropped for ten older models including the Xiaomi 12, 12 Pro, 12S Ultra, POCO X5 and X5 Pro, and the Xiaomi Pad 6 tablet series. Newer devices are promised up to five Android version upgrades and six years of security patches — a longer support cycle than the industry norm.
Leaked images of HyperOS 4 have also generated discussion. The operating system is expected to feature a redesigned interface with transparent “Liquid Glass” effects, described as the biggest visual overhaul since the transition from MIUI. Critics have warned that the real-time blur effects could strain graphics performance, increase battery drain, and reduce screen readability in direct sunlight.
On the artificial intelligence front, Lei Jun announced in March a planned investment of roughly 16 billion yuan — approximately $2.3 billion — into AI. The company also unveiled three large language models under the MiMo-V2 series, signaling ambitions that extend well beyond the smartphone business.
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Stock Recovery Remains Fragile
Xiaomi’s shares have staged a partial recovery in recent weeks. Over 30 trading days, the stock has gained 22.23%, closing Friday at €3.00. Yet that rebound barely scratches the surface of the year’s losses. The share price remains 53.96% below its 52-week high of €6.51, set in September 2025. The rally has been supported by fresh AI model announcements and anticipation of a facelift for the SU7 electric sedan, but the structural headwinds from rising chip and memory costs are far from resolved.
For investors, the coming months will test whether Xiaomi can execute on two very different fronts simultaneously. The SkyNomad SUVs offer a new growth trajectory and a chance to prove the auto division is more than a one-model story. But the smartphone segment — still the company’s core — is entering a product cycle where rising input costs and fierce competition could squeeze margins hard. How those two forces net out will likely determine whether the stock can sustain its recent bounce or drift back toward the lows.
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