Gloomy Predictions for Chinese-Made "Affordable God-Spec" Smartphones

The golden era of affordable smartphones made in China, promising “high specifications at low prices”, is now on the brink. For over a decade dominating the global market, this business model relying on thin margins is beginning to falter under immense pressure. The main trigger is the surge in memory chip prices due to the worldwide AI boom. This situation is exacerbated by geopolitical tensions disrupting the global semiconductor supply chain. If this trend continues, analysts predict the smartphone industry will enter a new gloomy phase. Cheap phones will no longer be pocket-friendly, and they will gradually become scarcer in the market. Signs of this crisis were already evident at the Mobile World Congress (MWC) held in Barcelona earlier in March. Several vendors showcased their latest devices, but they appeared confused about setting final prices. Normally, retail prices would have been locked in well before the product announcement. Xiaomi, for instance, boldly announced its latest series phone at 999 euros (around Rp 19.5 million) on stage. However, analysts believe this price is very likely to be revised when the product actually arrives in stores. This situation arises purely because the cost of the main component, namely memory chips, is fluctuating wildly. AI servers require high-speed memory known as high-bandwidth memory (HBM), which is typically paired with leading graphics processing units (GPUs) like those from Nvidia. In response to this high demand, major memory producers such as Samsung Electronics, SK Hynix, and Micron Technology have swiftly redirected their efforts. They have shifted much of their production capacity from conventional memory (for phones and PCs) to AI server-specific memory, which is more profitable. The impact is fatal: the supply of memory for consumer devices like smartphones and laptops has become extremely scarce. Research firm TrendForce notes that DRAM (main memory/RAM) prices have skyrocketed by 90-95% in just one quarter. Meanwhile, NAND flash (internal storage memory) prices have jumped 55-60% in the same period.