URGENT UPDATE: Samsung Electronics Co. is evaluating a potential price increase for its upcoming Galaxy S26 smartphones due to soaring costs of memory chips resulting from a critical global shortage. This development comes as supplies of DRAM, essential for smartphones and servers, have sharply tightened.
The memory crisis is largely driven by major manufacturers like Samsung and SK Hynix Inc. reallocating their production capacity toward high-bandwidth memory (HBM) chips for artificial intelligence applications. This strategic shift has significantly diminished the availability of general-purpose DRAM chips, forcing smartphone makers, including Apple, to secure long-term supply agreements extending through 2027.
In a recent report, research firm TrendForce announced a significant revision in its forecast for DRAM prices. It now predicts an alarming 38-43% increase in prices for LPDDR4 and LPDDR5 memory chips in the fourth quarter of 2023, up from earlier estimates of 18-23% and 20-25%, respectively. This marks the second upward adjustment in just a month, highlighting the severity of the supply crunch.
Mobile DRAM is expected to face the steepest price hikes, which could directly impact consumers looking to purchase the latest Galaxy S26 models. Additionally, TrendForce has adjusted its forecast for PC DRAM prices to reflect a 25-30% increase, up from 18-23%. Server DRAM, which lies at the heart of the current supply issues, is projected to rise by 28-33%.
The urgency for smartphone manufacturers to lock in chip supplies is palpable, as TrendForce reports that some suppliers have temporarily halted price quotes due to overwhelming orders from companies preparing for new product launches early next year. This escalation in demand amid dwindling supply raises concerns about affordability for consumers.
Samsung’s decision could have significant ramifications for the smartphone market, as rising costs may lead to higher retail prices, affecting consumers worldwide who are eager to upgrade to the latest technology. As we await further details on Samsung’s pricing strategies, industry watchers are keeping a close eye on the evolving situation.
Consumers should stay informed about potential price shifts as the launch date for the Galaxy S26 approaches. The ramifications of this global memory shortage are likely to unfold in the coming weeks, making it essential for tech enthusiasts and average consumers alike to prepare for what may be a challenging purchasing landscape.
