Samsung Electronics’ latest foldable smartphones, the Galaxy Z Fold7 and Flip7 (Image provided by Samsung Electronics)
SEOUL, Nov. 17 (Korea Bizwire) — Samsung Electronics’ spending on mobile application processors (APs) has surged to an unprecedented level this year, approaching 11 trillion won (US$8.1 billion) amid sharp increases in global memory prices—intensifying pressure on the company’s smartphone division and accelerating its shift toward greater use of in-house chips.
According to Samsung’s third-quarter regulatory filing, the company purchased 10.93 trillion won worth of mobile APs in the January–September period, up 3.14 trillion won from the first half of the year and 25.5 percent higher than the same period in 2024.
Mobile APs accounted for 19.1 percent of total raw-material costs in Samsung’s device experience (DX) division, also a record high.
The cost spike reflects Samsung’s heavier reliance on Qualcomm’s Snapdragon processors for premium models, including the Galaxy Z Fold 7 released in July.
While the Galaxy Z Flip 7 uses Samsung’s in-house Exynos 2500 chip, the flagship Fold model’s adoption of Snapdragon significantly increased procurement costs. Mobile APs typically represent more than 30 percent of a smartphone’s bill of materials.
Global chip prices have climbed sharply this year, fueled by an AI-driven boom in demand for high-performance memory such as HBM. As production capacity concentrates on advanced memory, prices for general-purpose chips—used in PCs and smartphones—have also risen.
Samsung reported that mobile AP solution prices were up roughly 9 percent in the third quarter from the previous year’s average.
Samsung Exynos Chip (Image courtesy of Samsung Electronics)
Market tracker TrendForce recently raised its fourth-quarter DRAM price-growth forecast to 18–23 percent, up from an earlier projection of 8–13 percent, and expects the rally to extend into next year.
The price surge is a boon for Samsung’s semiconductor division (DS), which benefits from higher memory margins, but it weighs heavily on the DX division, which must absorb the rising cost of components.
To protect profitability in its smartphone business, Samsung is expanding its use of Exynos processors. The company plans to equip next year’s Galaxy S26 lineup with the new Exynos 2600, designed by Samsung’s System LSI unit and manufactured by its foundry division. The chip is expected to be more cost-efficient than Qualcomm’s next flagship Snapdragon offering.
“With AI-related investment accelerating, shortages of mobile APs and other semiconductors will likely worsen,” an industry official said. “Strengthening Samsung’s in-house AP competitiveness is essential for cost control and profitability.”
The strategic pivot marks Samsung’s most aggressive attempt in years to reduce its reliance on Qualcomm and regain ground in the global mobile chip race.
Kevin Lee (kevinlee@koreabizwire.com)
