Making smartphones is becoming very expensive.
Credit: Counterpoint Research
Making smartphones is becoming very expensive.
Credit: Counterpoint Research
The good news for Samsung is that while the MX division is struggling, its semiconductor division is picking up. Samsung Semiconductor has broken records in the first quarter of 2026, making an estimated $38 billion (KRW 57.2 trillion) profit. This is more than seven times that of the first quarter of 2025.
Samsung, Micron, and SK Hynix are all accelerating plans to expand memory and storage production lines – Samsung in particular has begun reducing LPDDR4 production to boost LPDDR5 supply – but Nekkei Asia projects that won’t be enough. Even with the best improvements in output, DRAM production in 2027 could fall 40 percent below expected demand. The only thing that could challenge that prediction is a substantial change in demand for AI applications. With most of the world’s tech giants firmly committed to expanding AI computing over the next year, it’s unlikely that supply constraints will ease any time soon.
high demand, high prices
There are already signs that the cost of RAM and storage is making phones more expensive. Motorola recently increased the price of Its Moto G budget phone has increased by up to 50 percent. Low-cost devices like the Moto G will feel the rising cost of components the most, making the very idea of a budget phone questionable in the coming years.
With profitability likely to sink in 2026, Samsung is also making changes. The recently released Galaxy A37 and A57 mid-range devices come with a $50 price hike over the previous generation. The company has also raised the prices of some of the more expensive devices, adding $80 to the Galaxy Z Flip 7 (512GB) and Z Fold 7 (512GB and 1TB). Some of its tablets are also more expensive, including a $100 increase for the Galaxy Tab S11.
With profitability in doubt, Samsung is on the verge of releasing new, ultra-expensive phones. This summer, the company will introduce a new generation of Galaxy Z foldables, which always cost more than the Galaxy S series. These devices come with ample storage and RAM to help justify the exorbitant price. This makes them prime candidates for a price increase that would make foldables even more unrealistically expensive.
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