The era of the famous Chi-Fi audio players may be coming to an end, thanks to AI

The segment of low-cost Hi-Fi audio players, especially those from China and Hong Kong, cannot deliver the same high sound quality without increasing the prices. These brands, popularly called Chi-Fi because of their origins, include popular brands like FiiO and are known for delivering reliable sound without expensive prices.

However, recent pressure from outside the audio industry is forcing companies to raise their prices. In recent months, many of FiiO’s products have seen price increases, and some may even go belly up.

FiiO’s M21 and M33 have both seen increases of $40–50 in recent months. The JM21, seen as a gateway to dedicated Hi-Fi hardware, also saw its price increase by $60, from $200 to $260. While you might expect these prices to go up because of RAM or storage, there’s another aspect these DAPs share with larger AI computing rigs.

Small components that drive DAP prices

Headphones he notes that an increase in capacitor values, which is important in audio equipment, is present another important contributor to the more expensive Chi-Fi equipment. Capacitors are important in DAPs and DACs, as they store electrical energy and release it in a controlled manner. This protects the components from sudden voltage spikes that may damage the logic board.

AI data centers also use Multilayer Ceramic Capacitors (MLCCs), polymer capacitors, and high-performance supercapacitors for similar reasons. And as AI’s gold rush has sent brands scrambling to meet the demand of big customers like NVIDIA first, other industries have been left scrambling for limited supply. To keep up with demand, leading manufacturers, such as YAGEO Group’s KEMET, have increased the prices of tantalum-based polymer capacitors at least three times in the past three months.

Similarly, high-capacity components, such as MLCCs, have we have seen prices increase by almost 300%, while other popular models have also increased about 20 times. And there seem to be no signs of slowing down.

In addition to FiiO, other Chi-Fi brands that have seen their prices rise are HiBy, whose M500 x Hatsune Miku DAP now costs around $80. Shanling’s M3 Plus has also increased in price by $90 since launch.

Analysts predict that the MLCC will run out until mid-2027. It is then that we can see the increased power from major players, such as Murata, TDK, YAGEO, and Samsung Electro-Mechanics, finally showing their impact on the supply chain. Until then, we may see more flexibility and hikes across multiple product segments, and noise is unlikely.