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Xiaomi Profit Plummets Amidst Rising Chip Costs
26 May
Summary
- Xiaomi's Q1 2026 net income dropped 57% to 4.72 billion yuan.
- This sharp profit decline exceeded initial market expectations.
- Increased memory prices significantly impacted the smartphone business.
In the first three months of 2026, Xiaomi Corp. reported a substantial fall in its quarterly profit. Net income plummeted by 57%, reaching 4.72 billion yuan, which amounts to $695 million. This decline was more severe than analysts had anticipated, doubling the profit drop observed in the preceding quarter. The primary driver behind this significant financial setback was the sharp escalation in memory prices.
These increased costs for essential components placed a considerable burden on Xiaomi's flagship smartphone business. The rising expense of memory directly contributed to the reduced profitability, highlighting the vulnerability of the company's supply chain to fluctuating component costs. The impact was notable, underscoring a challenging start to the fiscal year for the Chinese technology giant.
