Why Samsung’s Memory Price Hike Could Make Smartphones More Expensive

Samsung Electronics is reportedly negotiating another 7%–10% increase in prices for the mobile DRAM and NAND flash it sells to smartphone makers. The reported negotiations are not a public company announcement, so their exact timing and terms remain unconfirmed. But the broader explanation is clear: the memory industry is prioritizing lucrative AI-server products, leaving less capacity for the low-power memory and storage used in phones. 3417

The core issue: AI memory is competing with phone memory

The same major memory suppliers that serve smartphone makers also supply high-bandwidth memory (HBM) and server DRAM for AI infrastructure. TrendForce says manufacturers are allocating advanced capacity to HBM and high-end server DRAM, limiting consumer DRAM supply and extending the impact into consumer electronics. 17

HBM is especially consequential because it requires substantially more wafer input than conventional DRAM. In other words, shifting production toward HBM can restrict the growth of overall DRAM bit supply even when suppliers invest in capacity. TrendForce expects continued HBM allocation and robust AI-server demand to keep DRAM supply constrained in 2027.

For phone makers, that means LPDDR—the power-efficient DRAM used in handsets—has become harder and more expensive to procure. NAND flash, which provides device storage, faces its own supply-and-demand cycle, but it is part of the same wider component-cost problem.

Why Samsung can ask more from rivals—and from Galaxy phones

Reports say Samsung’s Device Solutions semiconductor operation is discussing higher mobile-memory prices with Chinese smartphone brands, plans to revisit Apple negotiations in the fourth quarter, and would not exempt Samsung’s own mobile division. 34

That last point matters. Samsung’s chip and mobile businesses operate as separate divisions, so the semiconductor operation is not necessarily positioned to provide Galaxy devices with preferential chip pricing when external customers are paying market rates. The reported move is therefore better understood as supplier leverage in a tight market than as a measure aimed only at competing brands. 34

Apple has leverage, but it is not immune

Apple’s purchasing scale and supply-chain resources can give it more negotiating power than smaller brands, particularly when it can diversify suppliers or use NAND purchasing strategically. Yet its scale does not create extra LPDDR supply.

Earlier supply-chain reports said Apple accepted a roughly 100% increase for Samsung-supplied LPDDR5X used for iPhone 17 production. Those reports should be treated as unconfirmed reporting rather than disclosed contract terms, but they illustrate how sharply bargaining power can shift when supply is constrained. 1011

The newer reported 7%–10% proposal should not be read as a direct repeat of that alleged deal. It is a separate reported negotiation against an already elevated price base. 34

What higher memory costs mean for smartphone makers

Manufacturers generally have several imperfect options when DRAM and NAND become more expensive:

• absorb the added cost and accept lower margins;
• raise retail prices;
• reduce RAM or storage in some configurations;
• limit discounts, bundles or aggressive upgrade offers; or
• reduce production plans when component supply is uncertain.

Smaller and more price-sensitive Android brands are likely to face the hardest decisions because they have less purchasing leverage and less room to spread cost increases across expensive flagship models. IDC says memory costs have risen sharply and are putting particular strain on low-end devices, where memory can account for more than 65% of the bill of materials.

Will iPhones and Galaxy phones cost 7%–10% more?

Not necessarily. A 7%–10% increase in the price of selected memory components is not a 7%–10% increase in the price of an entire phone. Displays, application processors, cameras, batteries, logistics, currencies, tariffs and each brand’s product strategy also shape the final retail price.

Still, memory inflation makes higher average selling prices more likely. The visible effects may include less generous storage upgrades, fewer promotions, or a greater premium for models with high RAM and storage capacities. IDC forecasts worldwide smartphone shipments will fall 16.7% in 2026 to just over 1 billion units as the memory crisis raises costs and limits supply.

The pressure is likely to be most noticeable in budget and midrange phones, where a relatively small component increase can consume a large share of the manufacturer’s margin. IDC has warned that rising memory prices and shortages hit low-end Android devices particularly hard.

Why the shortage could last into 2027

A quick price reversal is not the base case in the supplied market research. TrendForce expects AI-server demand, HBM capacity allocation and the wafer intensity of HBM production to constrain DRAM supply growth in 2027, keeping prices on an upward path.

That forecast is not a guarantee. Additional capacity, changes in product mix, weaker AI infrastructure demand or softer handset demand could alter pricing. But the immediate direction is unfavorable for smartphone brands: they are competing for memory in a market where data-center buyers have made advanced memory more valuable.

For consumers, the likely result is not one universal price increase. It is a market with fewer inexpensive high-RAM or high-storage options, less discounting and more pressure on the prices of premium and AI-focused phones while the memory shortage persists. 17