Terminal price reduction, upstream price increase: the supply chain "two-way squeeze" behind the mobile phone price war

Recently, there has been a wave of price reductions for high-end models in the domestic mobile phone market. The three giants of Huawei, Apple, and Xiaomi have simultaneously taken action, with rare efforts in recent years: Huawei's foldable screen has dropped by up to 3000 yuan, Xiaomi's 15 Ultra has dropped by 1500 yuan, and the iPhone 17 Pro series has uniformly lowered by 1000 yuan. Coupled with platform subsidies and trade in programs, multiple models have set new price lows. This price war is not just a promotion, it reflects deep-seated contradictions in the industry and quickly spreads to the upstream electronic component supply chain, triggering chain reactions in multiple fields such as core chips, storage chips, and RF devices. Especially in the context of the continuous surge in storage chip prices, the contradiction between "terminal price reduction" and "upstream cost increase" has become increasingly acute, profoundly affecting the business rhythm and development pattern of the component industry.

The direct driving force for the collective price reduction of the three major giants comes from the triple combination of high inventory pressure, market share competition, and policy windows. In the first quarter of 2026, due to the impact of rising storage chip prices, the mobile phone industry collectively raised prices, resulting in a backlog of over 200 million terminal inventories in the second quarter. Manufacturers are eager to lower prices to recoup funds. At the same time, global smartphone shipments continue to be sluggish, and the high-end market has become a battleground, with price reductions becoming a key means of seizing market share. In addition, the implementation of the 62.5 billion yuan "trade in" national subsidy has lowered the threshold for consumers to replace their phones and provided policy support for price reduction. In addition, mobile phone innovation has entered a bottleneck period, with severe homogenization, and manufacturers can only rely on price to activate demand.

The pressure of terminal price reduction is rapidly transmitted upstream, and different categories of components are affected to varying degrees. Among them, storage chips have become the core of the contradiction, presenting a dual game of "terminal price reduction" and "upstream price increase". On the one hand, the demand for AI has triggered a storage "super cycle", and leading original manufacturers have shifted most of their advanced process production capacity to HBM products for AI servers, resulting in a severe squeeze on the production capacity of traditional chips such as LPDDR5X and DDR4 required for mobile phones, and supply shortages have become the norm. On the other hand, the price reduction of mobile terminals has forced manufacturers to strictly control costs and demand storage chip suppliers to lower prices. As a result, the profit margins of suppliers continue to be squeezed, and small and medium-sized storage traders are caught in a dual dilemma of "difficult and expensive procurement" and "terminal price suppression". In contrast, RF devices and CMOS image sensors (CIS) are subjected to milder impacts. In terms of RF devices, high-end models have not lowered their requirements for communication performance, and the procurement demand is stable. However, terminal manufacturers pay more attention to cost-effectiveness, which provides alternative opportunities for domestic RF manufacturers such as Zhuoshengwei. In the field of camera CIS, after the price reduction, consumers' attention to imaging functions has increased instead. Manufacturers have not reduced their investment in imaging, and orders from suppliers such as Sony and Huawei Technologies have been less affected. Some high-end CIS demand remains stable, becoming a "safe haven" in the supply chain. Passive components (resistors, capacitors, inductors, etc.) are mostly standardized products with fierce competition. Due to the impact of terminal destocking, short-term procurement demand has declined, and terminal price pressure has increased. The profit pressure on small and medium-sized manufacturers has also increased, and the industry reshuffle is expected to accelerate.

The core contradiction of this price reduction trend lies in the two-way pressure between "terminal price reduction" and "upstream component price increase". In the short term, suppliers of display panels, camera modules, RF chips, and other products will face stricter purchase price requirements. Although the purchase volume may increase, profit margins will continue to narrow. In the long run, the "siphon effect" of AI on consumer electronics production capacity is still ongoing: major manufacturers such as Samsung and SK Hynix are shifting most of their advanced production capacity to AI specific chips, and this trend is expected to continue until 2027 or even 2028. Small and medium-sized component buyers are facing a dilemma of either accepting sky high spot prices or not being able to buy them. In the industry landscape, a new round of reshuffle has already begun. The advantages of top manufacturers with long-term supply agreements or independent supply chain capabilities have expanded, while the survival pressure of small and medium-sized brands and component manufacturers lacking cost buffer space has intensified. IDC points out that top manufacturers are more capable of obtaining stable supply and controllable costs, and their market share will further concentrate on enterprises with supply chain moats.

Overall, this collective price reduction of high-end smartphones appears to be a terminal price war, but it is actually a centralized review of supply chain strategic capabilities. When the pricing logic of storage chips shifts from "terminal demand driven" to "AI capacity allocation", whoever has a more stable and cost-effective component supply chain will have the initiative in the price war. For the electronic components industry, instead of being fixated on the current order game, it is better to look further ahead: the structural pressure of AI computing power on traditional consumer electronics production capacity is still upgrading, and the fundamental reshaping of the global supply chain has just begun. In this changing situation, finding a stable procurement channel between high prices and shortages has become a core pain point for many small and medium-sized enterprises. ICGOO Online Mall, a subsidiary of Innovation Online Technology Group, relies on its strong supply chain integration capabilities and real-time inventory query system to provide users with one-stop procurement services for authentic components such as storage chips, RF devices, display driver ICs, and more. Whether it is long-term price locking and stocking, or responding to short-term urgent orders, ICGOO Mall can provide transparent market references and flexible supply solutions to help enterprises stabilize their cost bottom line and seize competitive advantages in the wave of price increases.