Owing to the skyrocketing prices of DRAM, Samsung's semiconductor arm has declined to enter into a long-term supply contract for mobile DRAM, spanning more than a year, with its mobile phone division. Instead, it has chosen to uphold a quarterly (three-month) supply framework. Despite efforts by senior management from the mobile phone division to negotiate, only a DRAM supply agreement for the fourth quarter has been secured. The escalation in chip prices is projected to hike the production cost of the Galaxy S26 by a minimum of 5%. In response, the semiconductor division is recalibrating its production lines to prioritize the manufacture of high-margin products.
