Xiaomi slashes 2026 target 30% to 95 million units as costs surge

Chinese smartphone makers are cutting 2026 shipment targets by as much as 30% as component shortages and rising costs batter the industry.

Xiaomi, Oppo and Vivo have slashed their 2026 smartphone shipment forecasts by as much as 30%, as rising memory-chip costs and unprecedented component shortages disrupt product roadmaps across China's handset industry.

"A 15% reduction in shipments has become the baseline for most Chinese smartphone makers," a component supplier told Nikkei Asia. The supplier said some brands have cut guidance by more than 20% or even 30% compared with the end of last year.

Xiaomi initially targeted 135 million units for 2026, down from 170 million last year, but has now cut its forecast to about 95 million, according to sources. Oppo and Vivo each revised their outlooks to below 90 million units. Honor, which shipped a record 71 million units in 2025, told suppliers it may not be able to maintain growth momentum this year.

The cuts threaten to deepen a broader market downturn. Counterpoint Research and IDC both forecast a 14% decline in the global smartphone market for 2026, with IDC projecting Android shipments to fall 21%. Apple, which raised iPhone prices last week, has also warned suppliers that its forecast could be revised if supply chain conditions do not improve.

The supply constraints extend beyond memory chips to printed circuit boards and other supporting chips, making it difficult for brands to plan new products even into next year, a smartphone brand manager told Nikkei Asia. An executive at another component supplier said rising costs are especially burdensome for manufacturers shipping mid- to low-end handsets, where consumers are highly price-sensitive.

"Lowering production targets is their best option; otherwise, they would face losses on every unit sold," the executive said.

Xiaomi faces the most acute pressure among the group, according to a component supplier cited by Nikkei. The brand's affordability proposition is being tested after widespread cost increases, and forecasts have been sharply lowered since March. The stock's short-selling ratio stood at 44.3% as of June 30, reflecting strong bearish positioning.

Supply Chain Squeeze Hits Mid-Range Hardest

The component crunch is reshaping competitive dynamics. Brands that rely on volume-driven, low-margin models — Xiaomi's core strategy — are most exposed to cost inflation they cannot pass through. Oppo and Vivo, which also target the mid-range segment, face similar constraints. Apple's premium positioning gives it more pricing power, but even the iPhone maker has flagged supply risks.

Xiaomi shares face further downside if supply conditions worsen, with the company's ability to maintain market share while absorbing higher component costs set to be tested in the second half. Suppliers of memory chips and PCBs to Chinese handset makers also face demand headwinds, as the 15% to 30% production cuts ripple through the supply chain.

This article is for informational purposes only and does not constitute investment advice.