Chinese Phone Makers Slash Shipment Targets Again Amid Cost Surges and Chip Shortages

Xiaomi Cuts Shipment Target by 30% to 95 Million Units, OPPO and vivo Follow Suit

According to foreign media citing multiple sources familiar with the matter, major Chinese handset manufacturers including Xiaomi, OPPO and vivo have notified their supply chain partners of another downward revision to their 2026 annual shipment targets amid surging memory chip costs and sustained component shortages. Xiaomi has slashed its latest target by 30% to approximately 95 million units, while OPPO and vivo have each revised shipment forecasts down to below 90 million units. Honor has also informed suppliers that it may fail to sustain growth momentum this year.

Shipment Downturn Has Become Inevitable, Mid-to-Low-End Models Take the Hardest Hit

Industry insiders stated that a 15% year-on-year shipment drop has become the baseline for most Chinese handset vendors, with some brands facing declines of over 20% or even 30%. Consumers shopping for mid-range and entry-level handsets are extremely price-sensitive, so rising component costs have dealt an outsized blow to manufacturers focusing on this segment. Cutting production targets has therefore become the most viable option — otherwise, every device sold would incur losses.

The strategy of capturing market share via economies of scale and razor-thin profit margins is facing unprecedented headwinds. Xiaomi is a typical example of this approach, as costs rise across the board, its price competitiveness has ironically become a liability, leaving little room for price increases.  OPPO and vivo, which also target the mid-tier market, have not been spared, and their profit margins keep shrinking. In contrast, Apple benefits from strong premium brand equity, granting it greater leeway to pass cost hikes to consumers. Even so, Apple has warned of supply chain risks and hinted at possible price increases.

Supply Chain Crisis Extends Beyond Memory Chips, Complicating New Product Launch Plans

Executives from smartphone brands disclosed that the ongoing supply chain tightness is far from limited to memory chips, PCBs and various chips are also in short supply. Delivery lead times for a wide range of materials have generally lengthened and become more unpredictable, making it difficult for brand owners to plan ahead. This uncertainty could even persist into next year, putting smartphone makers' production schedules and new product launch timelines under severe strain.