Memory Crisis Heavily Affected Xiaomi Profit in Q2

Xiaomi blamed the global memory crisis for year-on-year declines across its top line in 2Q26. The company, however, expects the situation to ease in the second half of 2026.

The Chinese electronics company recorded adjusted net profit of CNY6.2 billion ($919 million), a 43% drop, with revenue down 6.1% to CNY108.9 billion. It pointed to intensified industry competition and significant increases in key component costs, including memory, for the drops.

Smartphone revenue fell 7.5% due to a drop in shipments of low-to-mid-tier devices, though price hikes partially offset the decline. Analytics company Omdia placed Xiaomi’s smartphone shipments at 31.2 million units, down 26%.

Xiaomi has been hit hard by the global memory chip shortage as suppliers, including Samsung and SK Hynix, prioritize production of advanced AI-capable chips for data centres. This cut the availability of memory products for devices, in turn increasing prices.

However, Xiaomi president Lu Weibing indicated on an earnings call that there could be light at the end of the tunnel because the pace of memory price increases had started to slow. This trend, he stated, is expected to continue in H2.