According to industry sources, Samsung’s DS division has decided to limit memory supplies to the smartphone division, rejecting long-term contracts and enforcing more frequent negotiations. This move comes as DRAM prices continue to climb and global demand exceeds supply, pushing manufacturers to focus on more profitable markets.
For Samsung, this means that even within the same company, obtaining memory at favorable prices has become increasingly difficult.
The issue has grown so significant that top management had to step in to renegotiate agreements that, until recently, seemed solid. The Mobile Experience division has secured supplies only for the fourth quarter, with no guarantees for the months ahead.
In the past, contracts easily lasted over a year, but the current rise in memory costs has made such stability impossible.
Rising Prices and Strategic Priorities
A notable example involves the 12 GB LPDDR5X modules, which reached $70 in November — more than double the $33 recorded at the beginning of the year. With such high prices, the semiconductor division prefers to sell to customers willing to pay more, even if it means limiting supply to its own smartphone division.
This strategy aims to take advantage of the current shortage to boost profitability, looking ahead to future years when margins are expected to grow thanks to production advances with the 2 nm process.
Some estimates suggest that Samsung could achieve an operating profit of $69 billion by 2026, driven by the increased value of DRAM and NAND and by better yields in new-generation processes. To reach that goal, Samsung appears ready to make tough decisions — including giving priority to more profitable external clients over its mobile unit.
The ultimate aim is to make its foundry business profitable by 2027, a goal that requires strict resource management.
The most immediate impact concerns the upcoming Galaxy S26 series, expected in February 2026. With uncertain supplies and memory prices spiraling out of control, there is a real risk of higher launch prices. This could make it harder to maintain sales volumes, despite Samsung’s usual discount strategy in the months after release.
While this memory price surge affects the entire industry, Samsung’s case highlights just how difficult it is to manage a strained supply chain.
