Key facts
- Huawei aims to increase smartphone shipments by over 20% this year.
- The company plans to produce up to 60 million smartphones, up from less than 50 million last year.
- Huawei reclaimed China's smartphone crown in 2025, surpassing Apple by 0.2 percentage points.
- Memory chip prices have doubled due to AI data center demand, impacting the sub-$150 smartphone segment.
- Relief from the memory chip shortage is not expected before late 2027.
Huawei Technologies aims to increase its smartphone shipments by over 20% this year, targeting up to 60 million units despite a significant memory chip crunch. The company is working to recover from years of U.S. export controls and has told suppliers of its production plans. This push comes as the global smartphone industry braces for a structural contraction in 2026, driven by memory chip inflation that is doubling component costs due to high-bandwidth memory (HBM) demand for AI servers.
Huawei reclaimed the top spot in China's smartphone market in 2025, narrowly beating Apple. However, this victory occurs within a broader market contraction, with overall shipments falling slightly in 2025. The escalating costs of DRAM and NAND memory are making it difficult for manufacturers to maintain profit margins, particularly in the sub-$150 segment. Industry projections indicate that relief from the supply crunch is unlikely before late 2027.
The rising component costs create a bifurcated market. Vertically integrated players like Apple, which benefits from procurement volume, and Samsung, which manufactures its own memory, are better positioned. Huawei's strategy of focusing on premium tiers also helps insulate its average selling prices. Companies like Xiaomi, OPPO, and Vivo, which lack these advantages, are reportedly facing significant challenges in maintaining profitability.