Xiaomi launched its latest flagship smartphones globally on Saturday as an unprecedented surge in memory chip prices threatens to dampen sales.

The Xiaomi 17 and 17 Ultra represent the Chinese technology giant’s top tier devices aimed at challenging the likes of Samsung and Apple in the high-end segment of the market.

Xiaomi, which is the third-largest smartphone player globally, has maintained the prices of the devices versus last year’s flagship, even amid the huge jump in memory prices that are critical for smartphones. The Xiaomi 17 starts at 999 euros ($1,179) while the Xiaomi 17 Ultra starts at 1,499 euros.

In the first quarter of the year so far, memory prices have soared between 80% and 90%, Counterpoint Research said. This surge has been driven by a shortage of memory chips with supply being directed toward data centers for AI.

Memory is an expensive component in a smartphone. Smartphone prices could rise 13% in 2026, according to a Gartner forecast from Februrary. IDC forecasts the smartphone market to decline 12.9% in 2026 as a result of the chip crunch.

Analysts suggest companies selling more expensive phones will be more insulated and able to absorb the cost.

The bulk of Xiaomi’s volume comes from mid-range devices, a category that could take a hit to demand from any price rises. While its higher end devices will be unlikely to offset any losses.

“This year will be even worse because Xiaomi does not have a very strong premium share which means that they cannot rely on the premium segment to offset low margins in other devices like Apple and Samsung can,” Francisco Jeronimo, a vice president for data and analytics at IDC, told CNBC.

In November, Xiaomi management warned that the industry would likely have to raise smartphone prices in 2026.

Ben Wood, chief analyst at CCS Insight, said that Xiaomi will likely have to hike prices of their low-to-mid-tier devices.

While Xiaomi still makes the bulk of revenue consumer electronics, the company has been ramping up its electric vehicle business in China, which now accounts for around a quarter of all sales. That’s become an important source of revenue amid the memory crunch.

Xiaomi reported a 3% year-on-year decline in smartphone revenue in the September quarter, the last publicly-available financial figures. But sales at its electric car business surged nearly 200%.