As Samsung Electronics' flagship Galaxy S26 series officially debuts, a pricing battle over memory chips is quietly shaping the product line's profitability outlook. According to a February 25th report from South Korean media, Samsung's Device Solutions (DS) division quoted Apple a 100% price increase, which was unexpectedly accepted immediately. This outcome not only locked in an ultra-high price benchmark but also plunged Samsung's mobile business into a cost dilemma.
The report cited informed sources stating this sufficiently illustrates the intense competition among smartphone manufacturers for memory inventory. A chain reaction ensued: Samsung's DS division subsequently abandoned its long-term supply agreement (LTA) with the Mobile eXperience (MX) division, replacing it with quarterly contracts to maximize profits.
Amid a global shortage of general-purpose memory, Samsung's MX division, to ensure shipment volumes for the Galaxy S26 series, will source the LPDDR5X memory required for initial mass production equally from its own DS division and Micron Technology, each accounting for 50%.
Reports indicate both Samsung's DS division and Micron plan to significantly raise LPDDR5X supply prices in negotiations following the initial production phase, which is expected to substantially impact the profitability of Samsung's MX division.
On February 25th local time, Samsung unveiled the new Galaxy S series flagship models in San Francisco, USA. The base model S26 is priced at $899, and the S26+ at $1,099, representing price increases compared to the previous generation. Pre-orders in South Korea will begin on the 27th, with the official sales date set for March 11th.
Samsung's DS division demanded exorbitant prices, and Apple accepted them without question.
In the current tight memory supply environment, Samsung's DS division has doubled the price of LPDDR5X memory sold to Apple for the iPhone 17 series.
Media reports citing semiconductor industry sources revealed that Samsung DS's initial target was a price increase of approximately 60% for Apple. They used a 100% hike as an opening bid in the first round of negotiations, aiming to leave room for compromise. However, Apple accepted the offer on the spot, finalizing the price.
Apple recently held an emergency meeting specifically with Samsung's DS division to negotiate supply volumes for the first half of the year.
This outcome came at a high cost for Samsung's MX division. Samsung DS, having confirmed its pricing power in the memory market, subsequently adopted a similar stance on internal pricing.
Although the price increase for the MX division was lower than that for Apple, it was still significantly higher compared to the previous cycle.
Micron is also preparing to quote higher prices to Samsung's MX division. Due to relatively limited production capacity, Micron is expected to implement the most aggressive price hikes for mobile memory among the three major memory manufacturers. Industry analysts suggest that even if Samsung's MX division refuses the price increase, Micron faces no concerns due to strong demand from other customers.
Micron's share in initial mass production drops from previous generation's "full supply" to a 50/50 split.
The memory supply structure for the Galaxy S26 series reflects the delicate balance of interests between Samsung's semiconductor and end-product divisions.
Reports citing sources familiar with Samsung's internal affairs revealed that the MX division engaged in intense negotiations with both Samsung DS and Micron in the fourth quarter of last year, ultimately deciding on a 50/50 supply split for the initial mass production phase. The source stated that subsequent production volumes are yet to be determined, so there is currently no concept of a 'main supplier'.
This configuration differs significantly from the previous generation. During the first three months after the Galaxy S25 series launch, memory was sourced entirely from Micron.
At that time, Micron's products were considered superior in performance and yield compared to Samsung DS. Subsequently, Samsung DS continuously improved product quality, rapidly enhancing its competitiveness in mobile memory. The MX division then adjusted procurement ratios, concluding the Galaxy S25 series lifecycle with a 60% share from Samsung DS and 40% from Micron.
An industry insider pointed out that Samsung DS's consumer-grade memory faced intermittent recall issues about two years ago, but quality has significantly improved recently through optimized design redundancy.
Currently, both Samsung DS and Micron supply the MX division with LPDDR5X based on the 1b process. Notably, Micron has submitted samples of LPDDR5X based on the 1gamma (i.e., 1c) process to the MX division, but industry assessment deems it not yet ready for mass production, leading to a temporary postponement of its adoption.
As an alternative, the product Micron is supplying for this initial mass production is an improved version of the LPDDR5X used in the Galaxy S25 series. By optimizing circuit line width, production efficiency has been increased by approximately 15%, which helps improve Micron's profit margins.
Galaxy S26 series sees price hikes, but cost pressures remain difficult to fully offset.
Facing rising memory costs, Samsung's MX division is seeking multiple strategies to mitigate the pressure.
The launch prices for the Galaxy S26 series have increased compared to the previous generation: the base S26 is priced at $899 and the S26+ at $1,099, both higher than their respective Galaxy S25 counterparts.
Simultaneously, the MX division plans to incorporate approximately 30% of its in-house developed Exynos 2600 application processor in the S26 series to reduce reliance on externally sourced chips and associated costs.
Reports indicate that S26 and S26+ models sold in the European market will use the Exynos 2600, which is claimed to be the world's first mobile processor based on a 2nm process. Models for the US market will exclusively feature the Snapdragon 8 Elite Gen 5 for Galaxy.
However, the industry widely believes these measures are insufficient to fully offset the profitability pressure caused by memory price hikes. The rapid pace of memory price increases means that even with higher retail prices and the introduction of in-house chips, the MX division will struggle to completely neutralize the cost increments.
From a product perspective, the Galaxy S26 series continues the main design and functional architecture of its predecessor. All models come standard with 12GB of RAM and start with 256GB of storage.
The base S26 sees a slight screen size increase from 6.2 inches to 6.3 inches, and battery capacity rises from 4000mAh to 4300mAh. Camera specifications are largely consistent with the S25: a 50MP main sensor, 12MP ultra-wide-angle, and a 3x optical zoom telephoto lens, but it introduces ProScaler image enhancement technology and an MDNIe color processing chip.
On the software side, notable new features include a 360-degree horizon lock for the super steady video mode, AI Auto Framing, and an expanded Audio Eraser function now available on mainstream platforms like Netflix, Instagram, and YouTube.
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