Samsung Chips Reject Long-Term Phone Deals

Samsung is reportedly dealing with growing tension between its semiconductor unit and smartphone division as DRAM shortages continue to drive memory prices sharply higher.

According to Korean media, Samsung’s Device Solutions (DS) division, which runs the company's memory and logic chip business, is now reluctant to sign long-term DRAM agreements with its Mobile eXperience (MX) division, which makes Galaxy smartphones. The reason is simple: memory prices are rising fast, and the chip unit wants the flexibility to benefit from higher selling prices instead of locking in contracts that extend beyond 12 months.

Instead of long-term deals, Samsung’s chip team reportedly prefers to renegotiate prices every three months. This approach means the smartphone business must regularly re-enter talks to secure enough DRAM — a situation that has become serious enough to draw the attention of Samsung's top management.

For now, insiders say the MX division has only secured memory supply through the fourth quarter of this year. That uncertainty could spill directly into the next flagship cycle, with the Galaxy S26 lineup possibly facing higher production costs — and in turn, higher retail prices.

The numbers already show how extreme the market has become. The price of 12GB LPDDR5X memory has reportedly surged to about $70, more than double its level earlier this year when it stood near $33. With DRAM in short supply, Samsung's semiconductor unit has strong leverage to prioritize short-term gains over internal stability.

Despite the internal friction, Samsung as a whole is positioned to benefit financially. A senior industry researcher predicts the company's operating profit could reach around $69 billion in 2026, supported by rising memory prices, stronger NAND demand, and improvements in yields at its 2nm GAA process node.

Samsung's contract chip business is also expected to turn profitable by 2027, encouraging the company to focus on higher-margin opportunities across its semiconductor operations. In that context, memory — already in short supply and high demand — remains one of Samsung's most powerful profit engines.