Surge in Chip Prices Fuels Boom in China's Used Phone Market

Driven by a worldwide shortage of memory chips fueled by surging AI demand, the second-hand mobile phone recycling market has heated up sharply in China, with recyclers reporting broad-based price hikes for old handsets, Bandao Metropolis Daily reported yesterday.

Retailers said idle old phones that once fetched just a few dozen yuan now commonly sell for over 100 yuan (US$14.5). Even two non-functional old handsets recently sold for a total of 308 yuan, underscoring strong demand for recoverable components amid the tight chip market. One recycler reported monthly collection volumes rising from about 10 units to 30–40 per day.

Memory chips recovered and refurbished from used mobile phones can achieve performance close to that of brand-new chips, yet cost 40 to 60 percent less with no waiting time for supply, according to industry sources.

These recycled components are widely used in device repairs and the production of smart door locks, security cameras and other electronics. Android phones with large memory capacity are particularly sought-after in the recycling market.

The boom in used phone recycling is widely attributed to the global shortage of storage chips and the explosive surge in memory prices.

Major chipmakers, including Samsung and Micron, have redirected nearly 90 percent of their production capacity toward high-end AI-focused memory solutions, triggering a severe supply crunch for consumer-grade mobile storage chips. Spot prices for memory modules have jumped by 300 percent over the past three months, with forecasts pointing to a further 80–95 percent rise in the first quarter of 2026, according to tech media "Keji Xiaoxin."