Samsung's Chip Division Reportedly Prioritizes AI Data Centers Over Own Smartphone Unit
Samsung's chip division has reportedly prioritized AI data centers over its own mobile unit, driving up RAM prices. This internal shift highlights the massive impact of the global AI boom on consumer electronics supply chains and could lead to higher costs for future Galaxy phones.
In a move that highlights the intensity of the global artificial intelligence boom, Samsung's semiconductor division has reportedly prioritized selling high-demand memory chips to AI data centers over supplying its own smartphone business.
This internal conflict underscores a broader industry trend where the lucrative market for AI hardware is reshaping supply chains, even within vertically integrated giants like Samsung.
The Internal Rift: Profit Over Partnership
According to reports from early December 2025, Samsung’s Device Solutions (DS) division, responsible for manufacturing memory chips, rejected a long-term supply request from the company’s Mobile eXperience (MX) division, which produces Galaxy smartphones SamMobile.
The mobile division had sought to secure a year-long contract to lock in prices for DRAM (Dynamic Random Access Memory) chips, likely for the upcoming Galaxy S26 series. However, the semiconductor unit reportedly turned down the internal order, forcing the mobile team to renegotiate prices on a quarterly basis instead PCWorld.
This shift allows the chip division to adjust prices more frequently in line with soaring market rates, maximizing its own profitability at the expense of its sister company's margins.
AI Data Centers Driving "Chipflation"
The primary driver behind this decision is the explosive demand from AI data centers, which are willing to pay significant premiums for high-performance memory.
- Skyrocketing Costs: The price of a 12GB LPDDR5X RAM chip, a standard component in flagship phones, has reportedly jumped from approximately $33 earlier in the year to $70 by late 2025 Wccftech.
- Production Shift: Manufacturers are reallocating production lines to focus on High Bandwidth Memory (HBM), which is essential for AI processors like those from Nvidia, creating a shortage of standard mobile DRAM TechSpot.
- Quarterly Volatility: By refusing a long-term deal, Samsung's chip division can capitalize on these rising prices every three months rather than being locked into a lower rate.
Impact on Consumers
The inability of Samsung's mobile division to secure favorable internal pricing may have direct consequences for consumers. With component costs rising, industry analysts warn that Samsung may be forced to increase the retail prices of its future flagship devices or compromise on hardware specifications to maintain profit margins NewsBytes.
Official Response
While multiple industry reports have detailed this internal friction, Samsung officially denied the claims in a statement on (December 5, 2025). A company spokesperson stated that reports of the DS division rejecting customer requests were "baseless and not true," affirming that they remain in close communication with global customers TrendForce.
Despite the denial, the reported shift to quarterly pricing reflects the hard economic reality: in the current market, AI data centers are the priority customers, even if it means squeezing one's own family business.
