Samsung warns of 2026 smartphone price hikes amid "unprecedented" memory shortage

Samsung has warned that an unprecedented global memory chip shortage is set to drive smartphone prices higher, with the company conceding that cost increases for new devices in 2026 are now "inevitable."

Speaking as the company ramps up its push into AI-powered consumer electronics, co-CEO T.M. Roh said the company is not immune to the ongoing surge in memory prices, despite being one of the world's largest producers of DRAM and NAND flash. The shortage, Roh stressed, is affecting the entire consumer electronics ecosystem, from smartphones to TVs and home appliances.

The comments come as, according to Reuters, the tech giant plans to double the number of mobile devices powered by Google’s Gemini AI to around 800 million units in 2026. While the AI expansion is central to Samsung’s strategy to regain ground from Apple and fend off Chinese rivals, it is unfolding at a time when memory supply constraints are intensifying across the industry.

Roh described the current memory situation as "unprecedented," noting that no company has been spared from its impact. While higher memory prices benefit Samsung’s semiconductor division, they place direct pressure on its smartphone business, now its second-largest source of revenue.

Samsung did not rule out raising prices for future devices, acknowledging that surging memory costs will inevitably feed through to end products. The company's admission closely aligns with wider trends already playing out across the memory industry. As previously reported, rising DRAM prices, particularly for DDR5, have been driven by severe supply constraints and unprecedented demand from the rapidly expanding AI sector.

Memory manufacturers have increasingly prioritised enterprise-grade products such as High Bandwidth Memory (HBM) for data centres, where margins are higher and demand continues to surge. This shift has tightened supply for consumer DRAM, pushing costs higher across PCs, smartphones, and other connected devices.

The knock-on effects are becoming increasingly visible. Smartphone makers are reportedly reassessing memory configurations for 2026 models to offset rising costs, while PC manufacturers have already warned of potential price increases as DRAM accounts for a growing share of system bills.

For Samsung, the challenge lies in balancing its AI ambitions with the realities of a strained memory supply chain. While the company says it is working with partners on longer-term strategies to mitigate the impact, Roh made it clear that consumers should expect higher prices as the shortage persists.

Source: Reuters