Xiaomi's August Reckoning: Memory-Chip Inflation Collides With an EV Breakout
Published on 08/04/2026 at 02:41 | Redaktion boerse-global.de
The numbers arriving from Xiaomi's two core businesses this month could hardly paint a more divergent picture. On one side, the electric vehicle division has strung together four consecutive months of deliveries above the 30,000-unit mark, with July extending that run. On the other, the smartphone arm is absorbing its third price increase of the year, a direct consequence of memory-chip costs that have surged roughly 300 percent over the past twelve months. Investors, confronted with this split-screen reality, have responded by marking the stock down — the shares slipped to around €3.11 in Frankfurt on Monday, a decline of roughly 3.7 percent from Friday's close.
The Memory-Chip Squeeze Hits the Wallet
The latest round of price hikes took effect on August 2, touching eight to nine models across the Xiaomi 17 series, the Redmi K90, and the Turbo 5. The Xiaomi 17 Pro Max now carries a sticker price of 6,499 yuan, up 500 yuan, while the standard Xiaomi 17 has climbed to 4,799 yuan. International markets are feeling the pinch as well, with increases of $40 to $70 per device in some regions.
The culprit is a seismic shift in the semiconductor industry. Manufacturers of DRAM and NAND have been reallocating production capacity toward high-bandwidth memory for AI applications, tightening supply for conventional memory chips and sending prices skyward. Xiaomi executive Lu Weibing has quantified the damage: a configuration with 12 gigabytes of RAM and 512 gigabytes of storage now costs 1,500 yuan more to produce, and he warns the trend could persist into 2027 or even 2028. The pain is industry-wide — OPPO, vivo, Apple, OnePlus, and Honor have all raised prices, and some observers suggest flagship devices could eventually breach the 10,000-yuan threshold if the shortage intensifies.
These increases land at an awkward moment for Xiaomi's handset business. Global smartphone shipments fell 26.3 percent year-over-year in the second quarter to 31.2 million units, according to IDC, with market share slipping to roughly 11 to 12 percent. In China, the picture is starker still: Xiaomi shipped 8.2 million devices, a decline of about 21 percent, dropping the company to fifth place in a domestic market that contracted 4.3 percent overall. There are even indications that Xiaomi may skip an Ultra variant of its upcoming 18 series to manage costs, focusing instead on the Pro model. The broader chip ecosystem shows similar strain — the smartphone chip market shrank 15 percent in the first half, with Qualcomm and MediaTek both reporting delivery declines exceeding 25 percent.
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EV Momentum Tells a Different Story
The automotive division, by contrast, is generating headlines of a far more encouraging sort. July marked the fourth consecutive month of deliveries above 30,000 vehicles, and first-half shipments reached 185,055 units — a 17.2 percent improvement over the prior year. The YU7 SUV led the charge with 104,559 vehicles, while the SU7 sedan contributed 80,496 units, albeit down nearly half from the same period last year.
The next chapter hinges on the SkyNomad SUV line, unveiled in late July and built on the new "Xiaomi Kunlun" architecture. The two hybrid models — the five-seat N70 Max at 259,900 yuan and the seven-seat N90 Max at 299,900 yuan — are positioned below rivals like the Li L8 and are slated to begin deliveries in September. Deutsche Bank sees potential for around 150,000 units sold this year.
Yet the EV expansion comes at a cost. The segment posted an operating loss of 3.1 billion yuan in the first quarter, and the central question for the coming weeks is whether rising volumes can offset the development expenses tied to the Kunlun platform. The monthly delivery figures are encouraging — June's 34,738 units marked the second-highest month of the year — but the SkyNomad's true commercial performance won't show up in the financials until third-quarter results.
Two Dates That Will Shape the Narrative
August 18 looms as the first critical checkpoint, when Xiaomi reports second-quarter earnings. Analysts expect revenue of 116.84 billion yuan on average, and the market will be scrutinizing whether EV losses have narrowed from the first quarter. The second milestone arrives in September with the SkyNomad delivery launch.
The stock's technical position adds another layer of complexity. Trading roughly 16 percent below its 200-day moving average of €3.72, the shares remain in a downtrend despite a 30-day gain of nearly 20 percent that preceded Monday's pullback. The stock hit a yearly low in Frankfurt in late June and remains down about 27.8 percent year-to-date. With annualized volatility above 57 percent, this is not a name for the faint-hearted.
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JP Morgan struck a cautious tone in a research note on Monday, expressing doubt about whether Xiaomi can hit its 2026 EV targets and seeing limited near-term catalysts for the stock. Morgan Stanley, meanwhile, offered a more constructive view on the smartphone side in a July 31 report, suggesting sustained pricing power could provide margin relief.
The buyback program announced in June — up to 20 billion Hong Kong dollars — continues to run in the background, ostensibly providing technical support against dilution. With the relative strength index at 53.3, the stock sits in neutral territory, leaving room for a bounce if the news flow turns favorable.
What makes this moment particularly delicate is the sequencing. The second-quarter delivery figures are already baked into the August 18 report, but the SkyNomad's pre-sales will only surface in third-quarter results. Until then, investors must weigh the EV division's operational progress against the smartphone segment's margin pressure — and decide whether the former's momentum can outrun the latter's headwinds. The next few weeks will go a long way toward answering that question.
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