Seoul (South Korea)

Ahead of the Galaxy S26 launch scheduled for next month, Samsung Electronics signaled that price increases for its upcoming flagship smartphones may be unavoidable as global semiconductor costs surge and internal divisions face mounting margin pressure.

Speaking to global media ahead of the CES 2026 trade show in Las Vegas, Samsung's co-CEO and mobile business chief, Roh Tae-moon, stated that the current environment is "unprecedented" and warned that "smartphone price adjustments may be necessary" due to soaring chip costs.

The mobile industry faces a harsh pricing situation in memory driven by an industrywide supply crunch. According to a report by The Korea Herald, the price of general-purpose DRAM--8Gb DDR4--rose from USD 1.35 to USD 9.30 over the past year. This near sevenfold increase, reported by DRAMeXchange, directly impacts the bill of materials for new devices. Due to high demand for artificial intelligence infrastructure, "we're facing one of the harshest pricing situations in memory," the report quoted Roh on Monday.

The sharp rise in memory and application processor costs coincides with the preparations for the Galaxy S26. This device debuts Samsung's own 2-nanometer Exynos 2600 chip and various AI-powered features under the Galaxy AI brand. The Galaxy S26 serves as a strategic product to test the competitiveness of Samsung's vertically integrated model, involving its semiconductor and foundry service units.

Beyond hardware, the company focuses on expanding its artificial intelligence ecosystem. Roh stated that Samsung plans to double the number of Galaxy devices equipped with Galaxy AI features from 400 million to 800 million units by the end of 2026. "We aim to apply AI to every product, feature and service as quickly as possible," the report quoted Roh. Galaxy AI currently utilizes a hybrid of Samsung's in-house technology and Google's Gemini model to support generative features like image editing and on-device translation.

Internal surveys indicate that AI brand awareness among Galaxy users rose from 30 per cent to 80 per cent within a year. Despite this growth, the company reviews whether to begin charging for these services. While core features remain free for the time being, Roh acknowledged that some premium functions may move to a paid model following internal reviews and partner discussions.

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"Facing tougher price competition from Apple's iPhone 17 base model that was released last year, Samsung is under pressure to maintain similar price points for the Galaxy S26, despite a significantly higher bill of materials. Roh emphasized that Samsung is working with suppliers to develop long-term strategies to mitigate pricing impacts across its consumer electronics portfolio, including smartphones, TVs and home appliances," the report said.