Xiaomi President Misattributes Smartphone Price Increases to Memory Chip Costs

Xiaomi’s President, Lu Weibing, recently faced scrutiny regarding the pricing strategy for the new Redmi K90 smartphone series. In his defense, he attributed the increase in prices to rising “storage costs.”However, as we delve into the details, it becomes evident that the surge in NAND flash storage prices cannot solely justify the price hikes associated with the Redmi K90 lineup.

Xiaomi President’s Statement on Global Supply Chains and Storage Costs

Lu Wei Bing discusses price adjustment for K90 Standard Edition 12GB + 512GB to 2899 yuan, noting global supply chain challenges. — Xiaomi President Weibo Post

In a recent post on Weibo, Lu Weibing expressed, “we cannot change the trend of global supply chains, and the rise in storage costs is much higher than expected and will continue to increase.”At first glance, this seems to be a reasonable assertion.

Sep. NAND Flash prices updated on 9/30/2025 showing contract prices for 128Gb, 64Gb, and 32Gb with percentage changes. — Spot NAND Flash prices, as of September 30

Recent data from DRAMeXchange indicates that the average cost of a 128GB NAND flash chip is approximately $3.423. For context, the Qualcomm Snapdragon 8 Elite Gen 5, the system-on-chip utilized in the Redmi K90, ranges from $240 to $280, highlighting its significant impact on overall production costs.

If we were to estimate the price of a 256GB NAND chip by simply doubling the cost of the 128GB version, it would roughly tally to around $6.80. However, this linear extrapolation does not accurately reflect the usual pricing structure; thus, the real-world cost of a 256GB NAND is expected to be lower. Given that the Redmi K90 starts with a minimum storage of 256GB, this interpolation is necessary.

This indicates that a 256GB NAND flash comprises merely 2.6% of the total estimated cost of the Snapdragon 8 Elite Gen 5, based on the midpoint of its pricing range coupled with the interpolated NAND price.

Lu Weibing’s Inconsistencies

In his Weibo commentary, President Lu made the following claim:

“12GB + 512GB is the version with the largest user demand and the highest user voice. After discussion, we decided that the K90 standard version 12GB + 512GB version would be directly reduced by 300 yuan within the first sales month, and the price would be adjusted to 2899 yuan.”

Lu Weibing announced a price reduction of 300 yuan (approximately $42) for the 12GB + 512GB version of the Redmi K90 series. Notably, this discount surpasses the interpolated cost of the 256GB NAND, which suggests that storage costs are not a significant factor in the overall pricing strategy of Xiaomi.

Moreover, Xiaomi sources NAND chips from multiple vendors, making it less vulnerable to price fluctuations from any single supplier. While it is evident that the K90 series faces cost challenges, these are likely influenced by other factors, particularly the high cost of the SoC, rather than solely being impacted by NAND flash storage expenses.

In summary, while the new Redmi K90 series may be experiencing price adjustments due to various pressures, the excuse of soaring storage costs as the primary factor seems increasingly unfounded.

Source & Images