UPDATE: Samsung Electronics Co. is reportedly considering a significant price increase for its highly anticipated Galaxy S26 smartphones as the global shortage of memory chips intensifies. This urgent decision comes as costs for DRAM, a critical component in smartphones, surge dramatically, driven by a tightening supply chain.
The shortage has escalated as major manufacturers, including Samsung and SK Hynix Inc., pivot their focus towards high-bandwidth memory (HBM) chips used in artificial intelligence applications. This strategic shift has led to a substantial reduction in the availability of general-purpose DRAM chips, forcing smartphone makers like Apple to scramble for long-term supply agreements that extend through 2027.
Latest data from research firm TrendForce reveals alarming projections for DRAM prices. The firm has raised its forecast for fourth-quarter price increases across all major segments, marking its second upward revision within a month—an unusual occurrence. Mobile DRAM prices are expected to see the most significant hikes, with LPDDR4 (used in mid-range devices) and LPDDR5 (found in premium models) projected to jump by an astonishing 38-43%. Earlier forecasts had anticipated increases of only 18%-23% and 20%-25%, respectively.
TrendForce also adjusted its estimates for PC DRAM prices, now predicting a 25-30% increase, up from the previous 18-23%. The segment most affected by the ongoing supply crunch—server DRAM—is projected to rise by 28-33%. Furthermore, NAND Flash prices are expected to continue their upward trajectory each quarter through the end of 2024.
In an unprecedented move, some chip suppliers have temporarily halted price quotes due to an overwhelming surge in orders from smartphone manufacturers gearing up for new product launches early next year. This situation underscores the urgent need for companies to secure their components amid a chaotic market.
As Samsung prepares to navigate these challenges, the implications for consumers could be profound, potentially impacting the pricing landscape for smartphones across the board. Buyers may need to brace for higher costs as manufacturers adjust to the realities of the memory chip market.
Stay tuned for more updates as this situation develops. The tech world is watching closely, and consumers may need to act fast as the launch of the Galaxy S26 approaches.
