Some simple calculation:
Xiaomi smartphone GPM was 12.6% in 2024, with 192bn revenue.
Xiaomi sold 1.64 billion smartphones that year.
The GP per handset is about 147 RMB in 2024
Across different smartphone models, memory cost is different, ranging from 50-500 per handset.
But in a nutshell, it’s about 12-18% of BOM.
It’s could be about 150 memory cost per handset for Xiaomi, which is similar to GP per handset.
Then if memory cost is rising 50-100%, the entire GP per handset could be at risk.
To offset, Xiaomi may increase prices for customers.
And as a large customer for memory chips, it may not receive full mark-up immediately.
In the end, maybe 1/3 of the memory cost impact of 120 need to be absorbed by Xiaomi.
Then GP per handset could be more like 100-110 RMB.
And as the price increases, volume could be impacted, plus the RMB appreciation recently (two-thirds of Xiaomi smartphone volume is overseas).
Total impact to Xiaomi smartphone GP could be like 65-75bn, or 25-30% negative impact from 2024 level.