Samsung's storage division is overcharging, and Apple is buying it all—Samsung's mobile division is forced to use 50% Micron storage chips.

As Samsung Electronics’ flagship Galaxy S26 series is officially unveiled, a game surrounding memory chip pricing is quietly influencing the profitability outlook of this product line.

On February 25, South Korean media reported that Samsung’s semiconductor division (DS) quoted Apple a price doubled the previous rate, which was unexpectedly accepted immediately. This result not only locked in a very high price benchmark but also plunged Samsung’s mobile division into a cost dilemma.

The report cited insiders saying this demonstrates how intense the competition among phone manufacturers for memory inventory has become. At the same time, a chain reaction occurred: Samsung’s semiconductor division immediately abandoned its long-term supply agreement (LTA) with the MX division, replacing it with quarterly contracts to maximize profits.

Against the backdrop of global memory supply shortages, Samsung’s Mobile Experience (MX) division will ensure shipment volumes for the Galaxy S26 series by initially producing LPDDR5X memory, with half supplied by Samsung’s semiconductor (DS) division and the other half by Micron Technology, each holding a 50% share.

Reports indicate that both Samsung’s semiconductor division and Micron plan to significantly raise the supply price of LPDDR5X after initial mass production, which will substantially impact the profitability of Samsung’s Mobile Experience division.

On February 25, local time, Samsung launched the new Galaxy S series flagship models in San Francisco, with the base S26 priced at $899 and the S26+ at $1099, both higher than the previous generation. Pre-sales in Korea will start on the 27th, with official sales beginning on March 11.

(S26 Ultra official website screenshot)

Samsung Semiconductor Demands High Prices, Apple Accepts Fully

In the current tight memory supply market, Samsung’s semiconductor division has doubled the price for LPDDR5X supplied to Apple for the iPhone 17 series.

According to industry sources, Samsung’s semiconductor division initially aimed to raise Apple’s supply price by about 60%, starting with a 100% increase in negotiations, leaving room for further bargaining. However, Apple accepted this offer on the spot, fixing the price.

Recently, Apple also held an emergency meeting with Samsung’s semiconductor division to negotiate supply volumes for the first half of this year.

This outcome comes at a high cost for Samsung’s Mobile Experience division. Samsung’s semiconductor division confirmed its pricing power in the memory market and immediately adopted a similar price increase internally.

While the price increase for supplies to Samsung’s Mobile Experience division is lower than that for Apple, it still shows a significant rise compared to the previous cycle.

Micron is also preparing to offer higher prices to Samsung’s Mobile Experience division. Due to limited capacity, Micron is expected to be the most aggressive among the three memory suppliers in raising mobile memory prices. Industry analysts believe that even if Samsung’s Mobile Experience division refuses to accept the price hike, Micron’s strong demand from other clients will ensure no worries about sales.

Initial Mass Production with 50/50 Split from Last Generation

The memory supply structure for the Galaxy S26 series reflects a subtle internal power struggle between Samsung’s semiconductor and terminal product divisions.

According to insiders familiar with Samsung’s internal affairs, Samsung’s Mobile Experience division engaged in intense negotiations with both Samsung’s semiconductor division and Micron in Q4 last year, ultimately deciding on a 50/50 supply split for initial mass production. The insider said:

Currently, the subsequent production volume has not been determined, so there is no concept of a ‘main supplier’ at this stage.

This setup differs significantly from the previous generation. During the initial three months after the Galaxy S25 series launch, all memory was supplied by Micron.

At that time, Micron’s products were considered superior in performance and yield compared to Samsung’s semiconductor division. Since then, Samsung’s semiconductor division has continuously improved product quality, rapidly enhancing its mobile memory competitiveness. As a result, Samsung’s Mobile Experience division adjusted its procurement ratio, ending with a 60% share for Samsung’s semiconductor division and 40% for Micron in the Galaxy S25 series.

An industry expert noted that Samsung’s consumer-grade memory had experienced intermittent recall issues about two years ago, but recently, through design redundancy optimization, quality has significantly improved.

Currently, both Samsung’s semiconductor division and Micron supply LPDDR5X based on the 1b process to the MX division. Notably, Micron has submitted LPDDR5X samples based on the 1gamma (1c process) for Samsung’s Mobile Experience division, but industry assessments suggest it is not yet suitable for mass production, so adoption is temporarily delayed.

As an alternative, the initial production supply from Micron is an improved version based on the LPDDR5X used in the Galaxy S25 series, with about a 15% efficiency boost through optimized wiring, helping Micron improve profitability.

Galaxy S26 Price Increase, but Cost Pressure Remains Hard to Fully Pass On

Faced with rising memory costs, Samsung’s Mobile Experience division is seeking multiple measures to hedge the pressure.

The Galaxy S26 series’ launch prices have increased compared to the previous generation: the base S26 is priced at $899, and the S26+ at $1099, both higher than the Galaxy S25 counterparts.

Meanwhile, Samsung’s Mobile Experience division plans to include about 30% of its own Exynos 2600 application processors in the S26 series to reduce dependency on external chips.

According to reports, the European versions of the S26 and S26+ will use Exynos 2600, which is claimed to be the world’s first mobile processor based on a 2nm process; the US versions will all feature the Snapdragon 8 Elite Gen 5 for Galaxy.

However, industry experts generally believe these measures are insufficient to fully offset the profit pressure from memory price increases. The rapid rise in memory prices makes it difficult for Samsung’s Mobile Experience division to fully offset costs even with higher device prices and self-developed chips.

In terms of product design and features, the Galaxy S26 series continues the main architecture of the previous generation. All models come with 12GB of RAM and a starting storage of 256GB.

The base S26’s screen size has increased slightly from 6.2 inches to 6.3 inches, with battery capacity rising from 4000mAh to 4300mAh; camera specs are similar to the S25, with a 50MP main sensor, 12MP ultra-wide, and 3x optical zoom telephoto lens, but with new ProScaler image enhancement technology and MDNIe color processing chip.

On the software side, notable new features include a 360-degree super-stable video mode, AI auto framing, and expanded audio eraser functions for mainstream platforms like Netflix, Instagram, and YouTube.

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