With AI data centres soaking up new DRAM and pushing prices higher, budget handset makers in China are reportedly sourcing salvaged chips at a steep discount, raising fresh questions about reliability and transparency.
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Smartphone makers in China are reportedly buying memory chips pulled from scrapped phones, computers and servers as a way to hold down costs, according to industry reports published in October 2026. Some of the salvaged DRAM has already served five to six years and could be fitted into new devices for several more.
The shift reflects the strain the artificial intelligence boom is placing on the wider electronics sector. Chipmakers have been steering output towards more profitable products, notably high-bandwidth memory and server DRAM used in AI infrastructure, which has tightened the supply of low-power DRAM that phones depend on.
Why budget brands are most exposed
Entry-level manufacturers operate on thin margins, so absorbing higher component prices is difficult, and passing them on to buyers can make their handsets less competitive. Recycled chips reportedly sell for roughly 40% to 60% of the price of new ones, a gap that lets these firms keep producing affordable models.
The supply chain begins with discarded electronics. Technicians lift memory chips off circuit boards, clean them, strip away leftover solder and run performance tests before the parts are made ready for resale. The Huaqiangbei electronics market in Shenzhen has reportedly emerged as a key trading hub, while some refurbishment work is also done in Dongguan and Huizhou. The processed chips are then sold to manufacturers and other businesses seeking cheaper supplies.
Reports indicate the practice is aimed mainly at ultra-low-cost and entry-level phones rather than premium flagships. Some makers are said to be considering recycled chips for a large share, or even all, of the memory in certain budget models. However, which companies are involved has not been conclusively established. There is also no confirmed evidence that major brands such as Xiaomi, Oppo, Vivo, Honor or Huawei routinely use recycled DRAM in their flagship devices. The existence of a growing recycling market, in other words, does not prove that every Chinese brand is using secondhand memory.
Reliability questions and wider fallout
Reliability is the central worry. DRAM can degrade with age, weakening its ability to hold data accurately, and moving a chip from one board to another adds risk if the process is poorly controlled. Older memory may produce more data-retention errors, which can show up as app crashes, frozen screens or erratic behaviour. How serious the problem becomes depends on the chip’s condition, its operating environment and the quality checks applied.
A chip that clears a basic performance test may still fall short of a new component with a documented manufacturing and usage history over the long term. While there is no evidence that recycled RAM has caused widespread phone failures, the practice raises legitimate questions about durability and quality assurance.
Supporters note that reuse can extend the working life of electronic components and cut waste. But the broader pressure is unlikely to stay within China. Competition for memory could translate into higher handset prices, smaller memory configurations and greater interest in alternative sourcing elsewhere.
For consumers, transparency is the key issue. Manufacturers using previously used components should say so clearly, and provide dependable information on testing, warranty coverage and expected product lifespan.
