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Samsung faces semiconductor supply constraints and rising component costs for upcoming flagship series
Monday, January 5, 2026 at 07:28 AM
Rising costs for DRAM and NAND flash are impacting Samsung Electronics' supply chain, driven by high demand for AI-related HBM and server memory which has constrained smartphone-grade DRAM availability. The company is facing increased procurement costs for Qualcomm Snapdragon processors due to currency fluctuations, leading to a projected price increase for its upcoming flagship mobile devices.
Context
Samsung Electronics is set to raise domestic prices for its upcoming Galaxy S26 flagship series, marking its first price hike in three years. Internal policies suggest increases between 44,000 won and 88,000 won per model, potentially pushing the top-tier Galaxy S26 Ultra price near 1.8 million won. This strategic shift follows a period of frozen pricing intended to boost sales volume, a move that is no longer sustainable given deteriorating profitability in the mobile division.
The surge is driven by a severe semiconductor supply crunch and soaring component costs. Smartphone memory prices have more than doubled since early last year, with an additional 40% increase projected by the second quarter. Furthermore, Samsung spent a record 10.9 trillion won on mobile processors from suppliers like Qualcomm in Q3 alone. These costs are exacerbated by a weak won and the diversion of production capacity toward high-margin AI chips. The new lineup is expected to debut on February 25th with a commercial launch in March.
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