Core Viewpoint - The smartphone industry is facing unprecedented survival challenges, with the topic "the disappearance of budget smartphones" trending on social media [1][8]. Price Surge in Components - According to TrendForce, the spot price of mobile storage chips has surged over 300% in the last three months [3][10]. - The cost of 1TB flash chips has increased from around 200 yuan to nearly 600 yuan, marking a rise of over 200% [3][10]. - The procurement price for 12GB LPDDR5X memory has also doubled to nearly 600 yuan, while the price of 256GB UFS4.0 flash has approached a 90% increase [3][10]. Impact on the Smartphone Market - Due to the supply chain upheaval, major domestic smartphone brands plan to initiate a collective price adjustment in early March 2026, which will be the largest and most significant price increase in the last five years [5][12]. - The budget smartphone segment is facing the most severe impact, as the profit margins in this price range are extremely compressed, leading to a situation where the BOM (Bill of Materials) cost exceeds the selling price [5][12]. - The current market for budget smartphones has become unusually quiet, with manufacturers halting new product iterations and existing marketing efforts [5][12]. Consumer Demand and Manufacturer Dilemma - Analysts indicate that the forced increase in average smartphone prices has suppressed consumer demand for mid-range or entry-level models [6][12]. - Manufacturers face a dilemma: if they do not raise prices, they will incur losses on each unit sold; if they do raise prices, budget smartphones will lose their core price competitiveness [6][12]. Conclusion - The rising memory costs are pushing budget smartphones, once a market cornerstone, towards a difficult exit from the market [13].