Samsung, the world’s largest chipmaker, has increased the prices of its mobile memory chips by 10-20% for some of its largest smartphone customers, including OPPO, Xiaomi, and Google. The price increase is related to a decrease in memory chip supply due to lower output.
Samsung raises the price of their chipsets; rise in the price of smartphones soon?
According to the Korea Economic Daily, Samsung Electronics recently inked DRAM and NAND chip supply contracts with customers such as Xiaomi, OPPO, and Google at prices that are 10-20% more than its existing contracts.
According to a Samsung executive, the supply-demand balance in the memory chip market will shift toward a shortage as early as the fourth quarter of this year. In other words, Samsung anticipates a memory chip shortage in the fourth quarter.
“We understand that Chinese customers have agreed to accept Samsung’s chip price increase because they expect smartphone sales to grow, especially in overseas markets,” one of the people interviewed said.
Prices of DRAM chips such as LPDDR5X have gradually climbed in the upstream market, benefiting from the recent growth in the launching of new smartphone goods. According to market research firm TrendForce, Samsung began to tighten production controls in the second quarter and is projected to tighten further in the third quarter. Analysts warn that when stockpiles diminish, price rises are on the way.
This increased cost, combined with the shortage, will almost certainly have an impact on customers, who may have to pay more for devices. Smartphone and computer manufacturers that rely on these chipmakers’ products will almost certainly have to raise pricing to make up for losses. Rising prices may also have an impact on the product options of smartphone manufacturers.
It is not clear how much the increase in chip prices will impact the cost of smartphones, or if manufacturers will be willing to absorb the additional costs for the benefit of consumers. As a result, it may be necessary to budget more money in the coming year in order to purchase new devices.