Samsung to hike foldable phone price amid AI chip shortage

Seoul: The ongoing AI memory crunch is pushing tech giant Samsung Electronics to raise the prices of its upcoming foldable smartphone lineup once again, highlighting how the AI chip boom is altering consumer electronics pricing. The upcoming price adjustments mark a distinct departure from Samsung's historical pricing strategies.

According to a news report by The Korea Herald, leaked pricing from South Korean telecom distribution channels indicates that the entry-level Galaxy Z Flip8 will see an approximate 13 per cent price increase over its predecessor, driven by a global shortage of essential memory components.

The Galaxy Z Flip8 offers the clearest year-on-year comparison as it has a direct predecessor in the market. Citing a local outlet Bloter, the news report stated that the domestic price for the 256-gigabyte version of the Flip8 is expected to reach about 1.68 million won (USD 1,100). This represents a jump of roughly 198,000 won, or 13.3 per cent, from the Flip7.

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As per the news report, the larger Galaxy Z Fold line presents a more complex comparison due to a structural split in the upcoming generation. Samsung is dividing the line into a premium Fold8 Ultra, projected to cost around 2.58 million won (USD 1,842), and a new wider-format Fold8, expected near 2.28 million won (USD 1,628). Neither model has a direct, like-for-like predecessor from the previous year.

This upward price trajectory is visible outside of South Korea as well. German publication WinFuture, citing retail sources, reports that the 1-terabyte version of the Fold8 Ultra will experience a price hike of EUR 280 (USD 320), bringing its retail price to EUR 2,799 (USD 3201.13). The steepest increases are heavily concentrated on these high-capacity models where memory costs weigh most on production.

The broader industry shift stems directly from a dramatic reallocation of memory manufacturing resources. With massive AI data centers absorbing global memory production, the standard DRAM and NAND flash chips that smartphones rely on have grown increasingly scarce and expensive.

According to the news report, this component squeeze impacts Samsung in two opposing directions. While the memory chip shortage is expected to deliver a blockbuster quarter for Samsung's semiconductor division, the identical supply crunch is severely eroding margins within its mobile phone division. Some analysts believe the smartphone unit may have posted its first quarterly loss as component costs outran what the division could internalize.

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Samsung is reportedly scheduled to unveil the new devices in London on July 22, with a subsequent commercial release in South Korea on August 7, though the company has not formally confirmed these figures.

The inflationary pressure is affecting the wider mobile industry as well. Apple has previously raised its MacBook and iPad prices by up to USD 300, and several Chinese manufacturers have implemented similar increases.

Citing market research firm IDC, the news report noted that global smartphone shipments will contract by 12.9 per cent this year, with the decline heavily concentrated at the low end as rising component costs effectively price out the cheapest devices on the market.