Samsung adopts new strategy to tackle rising smartphone prices

Due to the ongoing AI boom, memory chip prices have surged by multiple folds over the past year, significantly affecting the smartphone market. Prices of both existing and new smartphone models have increased, putting pressure on manufacturers as well as consumers. To deal with this situation, Samsung appears to have taken a bold step, although it may raise some concerns.

According to a report from South Korean publication DealSite, Samsung started using OLED panels from Chinese display maker CSOT for mid-range devices such as the Galaxy A57. Previously, Samsung’s smartphone division primarily relied on OLED panels from Samsung Display. However, rising costs of memory chips and application processors have forced the company to source more components from Chinese suppliers for its entry-level and mid-range devices.

The company has also reportedly replaced KH Vatec, a South Korean supplier of hinges for Galaxy Z series devices, with Chinese firm Huanli for the Galaxy Z Flip 7’s hinge. In addition, Samsung has begun using ultrawide camera modules from Chinese suppliers in some Galaxy S series devices.

Chinese component makers have traditionally had a cost advantage over South Korean suppliers, but they are now also catching up in terms of technology. Industry insiders believe Samsung may increasingly source components from Chinese firms in the coming years as rising chip costs continue to impact the industry, and this will affect Korean component makers.