Qualcomm and TSMC have announced upcoming semiconductor price increases, which are expected to raise cost pressures on Apple and Samsung Electronics' mobile businesses. As Samsung competes fiercely with Apple, analysts suggest that the company will need to raise the average selling price of its Galaxy premium products while expanding the use of its own application processor, Exynos, to maintain profitability.
According to industry sources, Qualcomm plans to raise mobile chip prices by double-digit percentages starting September 1. In a letter to clients, Qualcomm explained that it has reached its limit in absorbing cost increases from suppliers.
Earlier, TSMC indicated it would raise prices for semiconductor foundry services, including advanced processes below 7 nanometers, by 5% to 10% starting in 2027. This is attributed to increased investments in AI data centers, which have prioritized advanced process and memory production capabilities for server semiconductors.
For Samsung, this means that the purchase price of Snapdragon chips for its Galaxy flagship devices and the production costs of its own AP could both rise. Even if Samsung reduces its reliance on Qualcomm, it may still face rising costs from TSMC and its own foundry's advanced processes.
Apple has also identified a lack of advanced semiconductor production capacity as a supply chain burden. However, the company reported a 16% increase in revenue and a gross margin of 50.1% in the third quarter of the 2026 fiscal year, indicating it has managed to absorb cost increases relatively well, better than Samsung.
Samsung has already begun raising prices with the Galaxy S26 series, adjusting the previously frozen prices of the Galaxy S series to reflect rising component costs.
Looking ahead, price increase pressures are likely to continue. However, experts warn that simply raising prices in response to rising costs may lead to consumer resistance.
Improvements in camera technology, on-device AI, battery performance, and foldable usability must support price increases to be perceived as part of a premium strategy. Samsung's efforts to increase the sales proportion of high-end products like the Ultra and Galaxy Z8 series align with this strategy.
The expansion of its own AP is also seen as a critical factor for future profitability. The Galaxy S26 series features the Exynos 2600, produced using Samsung's 2-nanometer process, but the top-tier S26 Ultra still uses Qualcomm's Snapdragon regardless of region.
Continued reliance on Qualcomm for the highest-priced Ultra model raises concerns about the limits of price negotiations for APs. Analysts suggest that Exynos must be applied to the top-tier products to serve as a viable alternative in negotiations with Qualcomm.
However, there are concerns that rushing to apply its own chips in the name of cost reduction could burden the Galaxy brand. It is suggested that Samsung should first ensure that its chips match Snapdragon in performance, heat generation, and battery efficiency before expanding their use.
Samsung possesses capabilities in AP design, foundry production, and smartphone manufacturing. If the system where the System LSI division designs chips, the foundry division produces them, and the MX division applies them to Galaxy devices operates smoothly, it could enhance Samsung's ability to respond to external semiconductor pricing policies.
In the mid-range segment, Samsung is expected to continue its strategy of applying Qualcomm, Exynos, and MediaTek chips based on region and price range. This could lead to a more segmented AP strategy, securing performance and brand trust in flagship models while enhancing cost competitiveness in budget models.
An industry insider noted, "The price increases from Qualcomm will be reflected in the profitability of set manufacturers after a delay as existing inventory is depleted. Exynos must be applied to the Ultra models to create real alternatives in pricing negotiations with Qualcomm."
* This article has been translated by AI.
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