Wang Teng warns Q2 memory price spike; China’s smartphone makers brace for layoffs

A grim near-term outlook from a seasoned insider

Wang Teng, founder of Yixiu Technology (宜休科技) and formerly the general manager of marketing for Xiaomi (小米) in China and head of the Redmi (红米) brand, said memory prices will continue to rise in the second quarter and predicted a wave of major layoffs across smartphone companies this year. According to Chinese tech outlet IT Home (IT之家), Wang argued that memory pricing may not “normalize” until 2028, noting that meaningful storage capacity expansions typically take two to three years. The message: tighter supply and elevated costs will persist longer than many device makers had hoped.

Why it matters: AI demand, tight supply, and margin pressure

DRAM and NAND prices have climbed over the past year as AI server demand diverts capacity—particularly for high-bandwidth memory—while leading suppliers such as Samsung, SK Hynix, and Micron keep a disciplined production stance. For smartphones, memory is a large share of the bill of materials. If costs keep rising, something has to give: retail prices, specifications, or headcount. China’s handset market has shown signs of recovery from a multi-year slump, but margins remain thin. Will vendors pass costs on to consumers or cut deeper internally?

Industry voices converge on a long upcycle

It has been reported that at MWC 2026 in Barcelona, Xiaomi (小米) President Lu Weibing (卢伟冰) called the current storage upcycle unprecedented and projected increases through the end of 2027—nearly three years from Q2 2025 to late 2027. Separately, Xiaomi Chair and CEO Lei Jun (雷军), who is also a deputy to China’s National People’s Congress, said AI-driven demand has left memory chips in short supply, putting “tremendous pressure” on the company’s smartphone and related businesses; yet Xiaomi reportedly is not facing stockouts for now. The consensus? Relief is not imminent.

Geopolitics and the road to 2028

U.S. export controls on advanced semiconductor equipment complicate China’s push to add domestic memory capacity at players such as YMTC (长江存储) and CXMT (长鑫存储), potentially lengthening timelines and raising costs. Meanwhile, global leaders are prioritizing higher-margin AI memory, limiting commodity output that phones rely on. Against that backdrop, Wang’s 2028 “normalization” timeline underscores a harsher reality for handset makers this year: higher component costs now, uncertain pricing power, and—if his warning proves prescient—broad layoffs before the cycle turns.