Rising RAM prices forced Samsung to change direction

Samsung is making remarkable changes in its production and supply chain in order to reduce the pressure created by rapidly rising memory (RAM) costs. While it is becoming increasingly difficult to maintain the price balance of low and mid-segment devices, especially in the smartphone market, it seems that the company is developing alternative solutions to maintain its competitiveness in this segment. While the increase in memory prices directly affects the cost structure of manufacturers, it is not always possible to pass on price increases to the consumer. Although these cost increases can be absorbed more easily in flagship models, the same flexibility is not available in more affordable devices. For this reason, it is noteworthy that Samsung is optimizing costs in different components.

According to information shared by South Korea-based DealSite, Samsung has started to prefer panels produced by China-based CSOT instead of its own OLED panels in some mid-segment smartphone models. This change, seen in models such as the Galaxy A57, aims to reduce costs. In addition, there is a similar trend in the foldable phone segment. It is stated that in the Galaxy Z Flip7 model, the hinge components previously supplied by South Korean KH Vatec were replaced by Chinese Huanli. However, it is stated that Chinese manufacturers are preferred for some ultra-wide-angle camera modules in the Galaxy S series.

Increasing role of Chinese manufacturers in Samsung supply chain

This approach by Samsung is not seen only as a short-term cost-cutting move; On the other hand, it is considered as a reflection of the transformation in the global supply chain. While the company is turning to more affordable components to offset the impact of the extraordinary increase in RAM prices, it still aims to keep product prices constant. This may provide a competitive advantage, especially in the user segment that is highly price sensitive. Despite this, some users express the opinion that Korean components are superior in terms of quality.

However, it is known that Chinese manufacturers have made significant progress in the field of technology in recent years. Increasing quality levels in many areas, from OLED panels to camera components, make these manufacturers more attractive. In addition, lower-cost solutions offered by Chinese companies help large manufacturers maintain their profit margins. It seems that Samsung also acts with this balance in mind.

According to industry sources, Samsung’s dependence on Chinese suppliers is expected to increase further in the coming period. This trend may pose some challenges for local component manufacturers in South Korea. However, considering the global competitive conditions, it seems inevitable that manufacturers will turn to solutions that provide cost advantages. These steps taken by Samsung are among the developments that will shape not only the company’s cost structure but also the future of the global technology supply chain.