The rising prices of memory chips, driven by increased demand for artificial intelligence (AI) servers, are impacting the smartphone market. Analysts suggest that the pressure on profitability for budget models, which struggle to absorb rising costs, may accelerate a shift toward premium products in the smartphone sector.
According to market research firm Counterpoint Research, the increase in memory prices is raising the manufacturing costs for smartphones, particularly affecting low-cost models.
Budget smartphones typically have lower selling prices than premium models, leaving them with less capacity to absorb rising component costs. When memory prices increase, manufacturers must either reduce their margins or raise product prices. Both options are challenging in the price-sensitive budget market.
Moreover, the surge in demand for memory used in AI servers is prompting memory manufacturers to focus more on high-value products for servers, further straining the mobile market. If the supply of memory for smartphones diminishes, mobile manufacturers may face additional increases in component procurement costs.
In contrast, premium smartphones have a greater ability to pass on cost increases to consumers. As manufacturers continue to expand AI features and adopt high-performance components, there is a growing trend toward selling more profitable high-end products.
Companies like Samsung Electronics, which operate both memory and smartphone divisions, are experiencing both the benefits and burdens of rising memory prices. While the semiconductor business sees price increases as a factor for improved performance, the mobile division faces higher production costs.
Industry experts are noting that if the rise in memory prices persists, smartphone manufacturers may adjust the specifications and lineups of their budget products. The memory supercycle is not only boosting the performance of semiconductor companies but also reshaping the product offerings in the finished goods market.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.