Xiaomi Battles a Two-Year Memory Cost Squeeze Even as Its SUV Ambitions Grow

A memory chip supply crunch that has quintupled procurement costs since last autumn is colliding with an ambitious push into electric vehicles, leaving Xiaomi fighting on two fronts. The company’s leaders have warned that margin pressure from soaring DRAM and TV-display memory prices will persist for at least two more years, just as the smartphone-to-EV conglomerate unveils a far wider SUV lineup than investors had expected.

Quadruple the Sky Nomad Models

Regulatory filings with China’s Ministry of Industry and Information Technology have revealed that Xiaomi plans not one but four extended-range electric vehicles under the new Sky Nomad brand. Alongside the flagship N90, two N70 variants — both five-seat SUVs — have been registered. Every model in the family uses a 1.5-litre petrol engine sourced from Harbin Dongan Automotive Engine, which acts purely as a generator to charge the battery while driving. The unit delivers a maximum net output of 112 kW and never directly drives the wheels.

Official performance data is still pending, but industry reports point to battery packs above 70 kWh, allowing for a pure-electric range of 400 to 500 kilometres. The combined range could exceed 1,500 kilometres, though Xiaomi has yet to confirm those figures. The Sky Nomad N90 aims squarely at China’s premium SUV segment, taking on the Li Auto L9, Aito M9 and NIO ES8 — all of which have carved out strong demand among buyers seeking spacious three-row vehicles packed with technology.

The platform underpinning the new lineup, codenamed Kunlun, has been in development since 2023. Last month Beijing gave regulatory approval for production of EREVs at Xiaomi’s factory in the capital. A technical presentation of the Sky Nomad platform is scheduled for late July, at which pricing and further specifications are expected.

Memory-Chip Crisis Weighs on Smartphone Margins

While the EV division races to ramp up, the core smartphone business is absorbing a cost shock driven by competition for semiconductor capacity. Speicherchips — particularly DRAM — are being diverted en masse to AI server builders such as Nvidia, TSMC and Samsung, leaving smartphone makers scrambling for supply.

Xiaomi president Lu Weibing has calculated that memory prices have quintupled since the autumn of 2025, and the cost of display memory for televisions has climbed tenfold. CEO Lei Jun has openly warned that this margin squeeze will last at least two more years. The candid timeframe underscores how structurally embedded the problem has become.

Should investors sell immediately? Or is it worth buying Xiaomi?

Stock Recovers from June Lows but Remains Deep in the Red

The shares closed Friday at €2.95, gaining 5.21% on the day and 11.30% over the past week. That rally has lifted the stock 25.99% from its 52-week low of €2.34 hit on 26 June. Yet the year-to-date loss still stands at 34.31%, and the 12-month deficit is 52.45%. From the 52-week high of €6.51 set in September 2025, the stock remains 54.69% lower.

Technically, the share now trades just below its 50-day moving average of €3.01 and far under the 200-day line of €3.89. The relative strength index of 60.6 signals neither overbought nor oversold conditions, but the annualised 30-day volatility of 42.47% suggests sharp price swings are likely to continue.

Co-Founder’s Sale Plan Is a Distant Cloud

Another factor that could weigh on sentiment is the announcement by co-founder and vice-chairman Lin Bin of a plan to sell Class B shares worth up to $500 million over a rolling 12-month period, with a total cap of $2 billion. The sales will not begin until December 2026, however, according to documents filed at the end of last year. Proceeds are earmarked for establishing an investment fund, and Xiaomi has stressed that Lin remains committed to the company.

Citi Research described the sale as a neutral event that could nevertheless affect market mood. The fund might eventually support new technologies that benefit Xiaomi’s AIoT ecosystem. Kenny Ng of Everbright Securities International noted that the practical impact is limited near term, given the 18-month delay before any selling starts. The initial market reaction — a 3.3% drop that quickly reversed into a 1.2% gain — reflected that assessment.

EV Division Must Deliver to Bridge the Gap

Xiaomi’s electric-vehicle business continues to post operating losses even as it targets ambitious delivery goals. The company aims to hand over 550,000 vehicles in 2026, up roughly 34% from the estimated 410,000 units delivered in 2025. The success of the Sky Nomad range will be critical to hitting that target.

For now, the company is juggling a memory-cost headwind that Lei Jun says will depress smartphone margins well into 2027, and an automotive expansion that has yet to turn profitable. The stock’s recent rebound from its June trough suggests investors are pricing in some optimism on the EV front, but the long road to recovery in the smartphone chain leaves Xiaomi exposed on both sides of the balance sheet.