Insta360, a leading Chinese action camera brand, is facing increasing pressure due to the soaring costs of chips driven by the AI boom. The company stated that this challenge is more daunting than the tariffs imposed by the United States.
Co-founder of Insta360, Max Richter, mentioned in an interview with Nikkei Asia that the chip demand from AI companies has squeezed the components crucial for Insta360’s operations, posing a severe test since 2025.
Richter emphasized that the unpredictable rise in chip costs depends on the duration of the AI investment cycle. “Currently, its impact may be greater than that of tariffs,” he said.
Most of the company’s products are manufactured in China, yet the North American market is its main source of revenue. Richter revealed that markets outside China contribute 70% to the company’s sales. Presently, Insta360 products are only retailed through authorized dealers in the United States.
According to a budget model from the Wharton School at the University of Pennsylvania, by 2025, the highest tariffs imposed by the US on Chinese goods reached 145%. As of mid-July 2026, the actual average tariffs on Chinese imports by the US were approximately 23%.
Currently, Insta360 collaborates with chip companies like Qualcomm and Ambarella.
Industry executives warn that the memory chip shortage could persist until 2027, impacting consumer electronics. Data from the market research firm TrendForce shows that in June 2026, the spot prices of mainstream DRAM chips rose by 700% year-on-year.
While sales growth and high-price strategies provide room for Insta360 to absorb higher component costs, Richter admitted that the rising costs are eroding profits. He declined to disclose the specific profit margin decline but mentioned that there are no plans for price increases at the moment.
With an expanding product portfolio, the company has been involved in several patent infringement lawsuits filed by competitors. In February 2026, the International Trade Commission ruled that Insta360 did not infringe on GoPro’s utility patents but did infringe on GoPro’s camera design patent with its early products. Currently, Insta360 is also in litigation with DJI Innovations, a Chinese drone manufacturer, regarding their gimbal patents.