Mobile Handset Industry Faces Rising Costs and Production Challenges

By the Editorial Team · Sunday, September 27, 2026

Bangladesh’s mobile handset manufacturers are facing sharply higher memory chip costs and intense competition from grey-market imports, which together threaten to raise smartphone prices and shrink local production. To protect the industry and government revenue, the government has launched the NEIR system to block unauthorized devices, but its enforcement remains incomplete amid resistance from parts of the trade.

Bangladesh’s mobile handset industry is confronting rising production costs amid ongoing competition from grey-market imports and challenges related to regulatory enforcement. Local manufacturers are grappling with sharp increases in memory component prices, particularly for RAM and ROM, which threaten to push up the costs of budget smartphones and disrupt an already fragile market.

Industry executives point to a significant surge in prices for key components, driven in part by expanding demand from artificial intelligence applications worldwide. Ziauddin Chowdhury, country general manager of Xiaomi Technologies Bangladesh, highlighted that the escalating costs of memory chips are placing “significant pressure on the affordability of entry-level and budget segments.” According to estimates by Gartner, combined prices for DRAM and solid-state drives could climb by 130 percent by the end of 2026 compared with 2025, potentially leading to a 13 percent increase in smartphone retail prices. Rezwanul Hoque, CEO of Ismartu Technology BD Ltd, reported that memory prices have already increased by 70 percent since January and are expected to rise another 40 percent in the coming three months.

Alongside these input cost pressures, local handset production is declining as manufacturers face stiff competition from unofficial imports, which account for an estimated 60 percent of handset sales in the country. This influx of grey-market devices undermines local manufacturers’ market share and reduces government tax revenue. To tackle this issue, Bangladesh introduced the National Equipment Identity Register (NEIR) system on January 1, 2026, which uses International Mobile Equipment Identity (IMEI) numbers to identify and combat unauthorized, cloned, and illegally imported phones. However, the enforcement mechanism to block such devices is not yet fully operational due to resistance from some segments of the mobile phone trade.

Industry stakeholders stress the importance of effective NEIR enforcement, alongside stable tax and regulatory policies, to enhance the competitiveness of local producers. The sector experienced expansion following the introduction of tax incentives in the 2017-18 fiscal year, resulting in the establishment of around 17 manufacturing plants. Nonetheless, subsequent policy shifts have contributed to investment uncertainty, affecting confidence among manufacturers.

As the combination of rising component costs, regulatory challenges, and grey-market competition continues to pressure Bangladesh’s handset sector, industry leaders are urging the government to provide clearer guidance and sustained support to enable domestic producers to remain viable in the evolving market landscape.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.