Huawei Says It Can No Longer Absorb Memory-Chip Costs and Will Have to Raise Phone Prices

The arithmetic behind China's phone prices this autumn has been laid out by Huawei itself. Yu Chengdong, the company's consumer-business chief, told a roundtable with international media on September 29 — a readout Huawei published on October 6 — that surging memory prices have added more than 200 US dollars to the cost of every phone Huawei makes. The company had been absorbing the increase on its own, he said, but profit margins are now falling sharply, and the readout as quoted on Zhihu records his conclusion plainly: if the business runs at a loss it cannot continue, and "a company must first be able to survive."

Yu argued that Huawei is squeezed harder than most rivals because its phones specify higher-grade memory, and that other manufacturers have already raised prices while Huawei deliberately moved more slowly so that consumers would carry less of the increase. Phoenix News Technology's summary of the remarks runs through the same points: absorb what you can, then raise what you must.

The timing makes the admission awkward. Huawei put the Mate 90 series on sale on October 1 at a starting price of 5,999 yuan — a launch the site followed at the time — and Yu called that price "very sincere." A single component category adding 200 dollars against a 5,999-yuan sticker leaves very little room to keep holding the line. He added that rises squeeze the entry level hardest and will push vendors upmarket: the buyer least able to absorb an increase is the one the industry is pricing out first.

On Weibo the remarks were read as a verdict on the whole industry rather than one company's price list. A chip-industry blogger wrote that price rises this year are simply unavoidable, and that what matters now is how each maker chooses to absorb or pass on the cost — a framing that treats Huawei's numbers as the sector's new baseline. The pressure is not Huawei's alone: memory chips are the component no phone ships without.

Huawei also has reasons beyond margin to defend its pricing. According to Baidu's trending roundup of the story, the company is trying to rebuild its phone business in Europe, a market where it is re-entering as an outsider and where value-for-money perceptions will matter from the first relaunched model.

How much of that 200 dollars reaches the shelf — on Huawei's phones first, or on every brand's at once — is what the rest of the shopping season will answer.