According to a report released today, citing Korean media outlet Sedaily, Samsung’s semiconductor division (DS) has refused a request from its smartphone division (MX, responsible for Galaxy phones) for a long-term DRAM supply contract.
The background: DRAM prices have surged recently. Samsung DS is shifting its focus, prioritizing high-profit products such as high-bandwidth memory (HBM) for AI accelerators and low-power DRAM (LPDDR) for mobile and other high-margin markets, to maximize profits.
As a result, when the MX division requested a multi‑year DRAM supply agreement (for over a year), DS declined. Instead, they only agreed to short‑term deals: DS will issue quarterly contracts (every 3 months). After negotiations — including a personal intervention by MX senior executives — the only commitment reached was a DRAM supply contract for the fourth quarter until year‑end.
This move comes just as the DRAM “super‑cycle” has dramatically increased memory prices. Industry insiders say that the high cost is forcing MX to scramble to protect profits.
At the same time, smartphone component costs are rising across the board — not only memory but also mobile processors (APs). Reportedly, Samsung’s mobile‑AP procurement costs have jumped significantly in the past quarters.
Given that in a typical smartphone, the mobile processor accounts for around 20% of total cost and memory chips about 15%, the surge in DRAM and AP prices has increased their share of total cost by an estimated five percentage points or more.
According to analysts, the refusal to lock in long‑term DRAM supply reflects that DS is determined to ride the memory price boom rather than guarantee a cheap supply to its own phone business. One industry source commented: “AI accelerator demand is eating up HBM and even LPDDR output — DS just cannot ignore this profit tide.”
Such a move may foreshadow increased cost pressure on upcoming devices from the MX division — including the rumored Galaxy S26 series — possibly leading to higher product costs or slimmer margins.
The above content is compiled by ModeZone, a fashion and entertainment magazine.
