Strategic Tensions Emerge Between Samsung Phone and Memory Divisions

Samsung Internal Conflict Over RAM Prices May Force Galaxy Price Hikes

Samsung is facing a major internal dispute. Its memory chip division has rejected a long-term supply deal from its own smartphone unit. This conflict threatens to raise production costs for future Galaxy phones.

The disagreement centers on the skyrocketing price of DRAM memory chips. According to Reuters, Samsung’s mobile division sought stable pricing for at least a year. The memory unit refused, aiming to sell chips at higher market rates for maximum profit.

Samsung Galaxy price hike

AI Boom Drives Memory Chip Prices Skyward

Memory chip costs have surged dramatically this year. The price for a key 12GB mobile DRAM chip more than doubled from $33 to $70. Industry analysts predict further increases in 2025.

This spike is fueled by intense demand from the artificial intelligence sector. AI servers require vast amounts of high-bandwidth memory (HBM). Samsung’s chip division is prioritizing these lucrative AI contracts over internal phone orders.

Consumers Likely to Bear the Brunt of Rising Costs

The internal stalemate creates a serious problem for Samsung’s phone business. Component costs are rising across the board. Samsung’s spending on mobile processors jumped over 25% in just one year.

This perfect storm of higher costs for both processors and memory puts immense pressure on profit margins. To maintain profitability, Samsung may have no choice but to increase retail prices. The Galaxy S26 series could launch at a higher price than its predecessor without major new features.

This internal corporate rift highlights a fragile supply chain. The coming Samsung Galaxy price hike may become a direct result of the company’s own divisions competing in a red-hot AI market.

Info at your fingertips

Why did Samsung’s memory unit reject the deal?

The memory division wants to sell chips at current high market prices. It believes it can make more money from external AI companies than from a fixed-price internal contract with the mobile division.

What does this mean for Galaxy phone buyers?

Consumers will likely face higher prices for upcoming Samsung smartphones. The company may pass on increased component costs to maintain its profit margins on each device sold.

Are other smartphone makers affected?

Yes, all manufacturers face the same rising memory and processor costs. However, Samsung’s unique position as both a chipmaker and phone maker makes this internal conflict particularly notable.

Could Samsung use another supplier’s RAM?

It already does. Some recent high-end Galaxy models use DRAM chips from Micron. This internal dispute may force the mobile division to rely more on competitors like Micron or SK Hynix.

Will this affect Galaxy phone performance?

Performance should not be directly impacted. The issue is cost, not chip quality or availability. However, budget constraints could influence future design decisions regarding how much RAM is included in base models.