The memory chip shortage driving up new smartphone prices is delivering a windfall to the used-phone recycling industry. As new devices become unaffordable for many, trade-ins are surging: China's daily used-phone processing volume has grown sevenfold in six months to roughly 1.5 million units, and some models' trade-in values now exceed their original launch prices . Following the iPhone 17 launch, second-hand transactions jumped 280% month-on-month, with the standard model up over 700% .

Competition is heating up among Chinese platforms. ATRenew (Aihuishou) posted Q2 2026 revenue of RMB 6.61 billion, up 32.4% year-on-year, with non-GAAP operating profit surging 70.1% . Rival Zhuanzhuan is reportedly preparing a Hong Kong IPO within three years, while Alibaba's Xianyu — with 234 million monthly active users — has elevated its recycling channel to its homepage core position to build a closed collection-to-resale loop.

Globally, the industry is professionalizing. The EU's Right to Repair directive took full effect in 2026, and both Apple and Google have expanded certified refurbishment programs — Apple broadening its refurbished range and Google launching an authorized refurb initiative in India . Industry reports also highlight AI-powered sorting and automated disassembly as key trends, alongside certified data destruction becoming a competitive necessity .

With memory costs likely to stay elevated into 2027, the circular second-hand market will keep absorbing demand that new phones cannot. Platforms with closed-loop models and transparent pricing are best positioned — though rising inventory costs and margin pressure remain key risks.