Since the second half of 2025, a sweeping price surge has swept across the global memory chip market. Driven by booming demand for AI computing power, dramatic price increases for DRAM and NAND Flash have profoundly reshaped the cost structure and industrial landscape of the smart TV sector. As the world’s largest manufacturer and consumer of smart TVs, China is confronted with squeezed profit margins and unstable supply. Meanwhile, this challenge also presents an opportunity to accelerate the independent development of local supply chains and enhance industrial resilience.
I. Memory Price Hikes: From a Minor Expense to a Core Cost Factor
The current round of memory price increases features steep growth, a prolonged cycle and structural supply imbalance, overturning the long-standing industry cost model where display panels dominated and memory chips played a supplementary role.
1. Skyrocketing Prices Beyond Market Expectations
According to TrendForce, the contract price of mainstream 4GB DDR4 memory for smart TVs surged by over 400% from the second half of 2025 to the first quarter of 2026, jumping from $7 to over $30. The price of 64GB and 128GB NAND Flash rose by nearly 150%, with a further 33% to 38% increase projected for Q1 2026. Compared with the annual 5%–10% normal fluctuation in memory prices in previous years, this round of hikes has drastically rewritten the overall cost accounting rules for smart TV products.
2. Rising Proportion in Total Bill of Materials (BOM)
Before the price surge, DRAM accounted for merely 2.5% to 3% of a smart TV’s total BOM cost. After the hikes, its share climbed to 6%–7%, and even exceeded 8% for high-end models equipped with larger memory capacities. Industry forecasts indicate that by Q3 2026, memory costs will likely surpass those of power supplies and mainboards, becoming the second-largest expenditure after display panels, which take up 40% to 50% of total costs.
3. Root Causes: AI Demand Crowds Out Consumer-Grade Production Capacity
The price surge is essentially a result of AI servers siphoning production capacity away from consumer electronics. To seize high-margin AI business, top global memory suppliers including Samsung, SK Hynix and Micron have substantially cut wafer output for consumer-grade memory, and prioritized production of high-bandwidth memory (HBM) and LPDDR5X chips dedicated to AI servers. Global demand for memory used in AI servers surged by more than 200% year-on-year in 2025, creating a supply gap of over 30% for memory chips applied to TVs, mobile phones and other consumer devices. This supply-demand imbalance is expected to last until 2027.
II. China’s Smart TV Industry: Pressures and Internal Divergence
China accounts for more than 40% of global smart TV shipments, home to leading brands such as Hisense, TCL, Skyworth and Xiaomi, as well as thousands of OEM manufacturers. Hit by memory price hikes, the industry has become increasingly divided: major players boast stronger risk resistance, while small and medium-sized enterprises (SMEs) face severe operational difficulties.
1. Industry Status: Multiple Pressures Lead to Shrinking Profit Margins
First, rising overall costs erode profitability. Alongside memory chips, display panel prices have also rebounded since Q1 2026, pushing the total production cost of smart TVs up by 8% to 12% year-on-year. Fierce market competition restricts price adjustments for end products, dragging the average net profit margin of the industry down from 5%–8% in 2024 to 1%–3% in Q1 2026. Many small manufacturers have fallen into losses.
Second, unstable supply delays product delivery. Chip shortages have disrupted production schedules. For SMEs with weak bargaining power, the order delivery cycle has extended from the standard 45 days to 60–90 days, and some product lines have even been forced to halt production. Although major brands are protected by long-term supply contracts, their high-end models still suffer from insufficient memory allocations.
Third, product strategies diverge sharply. To cut costs, most SMEs have downgraded hardware configurations, switching mainstream 4GB+128GB setups to 3GB+64GB or even 2GB+32GB, which undermines product performance and user experience. In contrast, leading brands choose to upgrade product specifications and raise prices. They enhance product competitiveness by optimizing display quality and smart functions to offset cost pressures, driving growing market share for large-size TVs above 55 inches.
2. Core Predicament: High Dependence on Imported Memory
The global memory market is highly monopolized. Samsung, SK Hynix and Micron control over 90% of global DRAM production capacity. Chinese manufacturers are still catching up in high-end memory sectors, with only a handful of domestic producers capable of supplying low-end eMMC chips on a limited scale. Trapped by this supply structure, Chinese smart TV brands have little bargaining power and have to accept price increases passively.
In addition, supply chain management capabilities vary widely across domestic enterprises. Top brands adopt long-term contracts and strategic stockpiling to cushion market volatility, while most SMEs follow a just-in-time purchasing model with no risk reserves, leaving them vulnerable to shortages and price spikes.
III. Supply Chain Risk Control: Solutions for Chinese Enterprises
To tackle the long-term challenges posed by memory price hikes, Chinese smart TV manufacturers need to shift from passive responses to proactive risk prevention. A comprehensive strategy covering diversified supply, refined inventory management, technological independence and industrial collaboration is required to build robust supply chains.
1. Diversify Supplier Portfolios to Reduce Supply Risks
For leading enterprises, sign 1–3 year long-term fixed-price contracts with global top memory vendors to lock in production capacity and stabilize costs, while securing priority supply for high-end products.
Accelerate the localization of memory chips. Give priority to adopting domestically produced DDR4 and eMMC chips for mid and low-end models, and support local players such as ChangXin Memory Technologies and Yangtze Memory Technologies with industrial funds and preferential tax policies to expand production and upgrade technologies.
Expand cooperation with second-tier memory suppliers including Nanya Technology and Winbond Electronics to form a multi-source supply system. SMEs can launch group procurement to enhance collective bargaining power.
2. Implement Refined Inventory Management
Establish a strategic stockpiling mechanism. Maintain safety inventory of mainstream memory products equivalent to 1–2 months of production demand, striking a balance between sufficient supply and reasonable capital occupation. Major companies can increase stockpiles during price downturns to hedge against future cost hikes.
Optimize the just-in-time (JIT) procurement model. Deploy digital management systems to share sales, inventory and production data with suppliers, so as to place accurate orders and avoid overstocking. SMEs can leverage third-party supply chain service platforms to realize shared inventory and coordinated allocation.
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