An unusual internal dispute is brewing within Samsung , pitting the company’s semiconductor arm against its smartphone division. As global DRAM prices skyrocket, the Korean giant’s semiconductor division (known as DS) has reportedly rejected a long-term supply request from the Mobile Experience (MX) division, forcing the phone makers into uncertain, quarterly negotiations for memory chips.
This conflict stems from a significant shift in priorities. The DS division is focusing on maximizing profitability amidst the so-called memory “super cycle.” So, it has opted to prioritize high-margin contracts. This includes products like High Bandwidth Memory (HBM) and specialized LPDDR chips used in AI accelerators. The strategy, aimed at helping Samsung achieve major profit targets in the coming years, has left its sister division, MX, in a tough spot.
Galaxy S26 price hike threat among Internal Samsung dispute over memory costs
The memory market has seen dramatic price increases , forcing the internal conflict into the spotlight. The cost of 12GB LPDDR5X RAM, a key component in premium Galaxy phones, has more than doubled this year. It climbed from approximately $33 to around $70.
The MX division, which produces the Galaxy smartphone lineup, usually secures long-term DRAM contracts to lock in pricing and guarantee supply for upcoming launches. However, the DS division now requires MX to renegotiate supply volumes and pricing every three months . Even a reported intervention by high-ranking executives could only secure supply for the fourth quarter. This means the MX team faces ongoing uncertainty and escalating costs .
The profit squeeze
This situation places immense cost pressure on Samsung’s smartphone business. Component costs, particularly for the mobile application processor (AP) and memory chips, typically account for a large percentage of a phone’s manufacturing expense. With memory prices soaring and negotiations forced quarterly, the MX division’s profit margins face a serious squeeze.
The biggest trade-off now sits with the upcoming Galaxy S26 series , expected to launch in early 2026. Industry analysts suggest that these rising memory costs create a high risk of a price hike for the flagship phones. While Samsung often applies discounts shortly after launch, an elevated starting price tag could still impact initial sales and potentially make the Galaxy S26 less competitive globally.
