AI's insatiable demand for HBM will drive up the price of all electronic devices, not just smartphones, by 2026

Samsung Electronics President Roh Tae-moon holds up a Galaxy S25 series mobile phone at the “Galaxy Unpacked 2025” event held at the SAP Center in San Jose, California on January 22, 2025. [SAMSUNG ELECTRONICS]

With the spread of AI, demand for semiconductors is rapidly increasing, and the prices of home appliances such as smartphones and home appliances are rising. Samsung Electronics' next flagship smartphone “Galaxy S26” series scheduled to be released in February may not be able to maintain its price freeze policy.

The Financial Times reported on Thursday that prices of major electronic products such as smartphones, computers and appliances could rise by as much as 5-20% this year.

This is because demand for HBM used in AI data centers is surging, pushing general-purpose DRAM production down the priority list, leading to both supply shortages and price hikes.

Jeff Clark, chief operating officer of US PC maker Dell Technologies, said in an earnings call last November that the production decline was not limited to DRAM, with demand outstripping supply across NAND flash memory, hard drives and semiconductor networks.

Despite soaring prices, the proportion of memory components in electronic devices continues to increase as AI functionality expands, and manufacturers are becoming increasingly concerned.

According to semiconductor research firm TrendForce, the proportion of memory in the manufacturing cost of notebook computers this year is expected to rise from 10% to 18% to more than 20% due to the integration of AI functions.

Samsung Electronics' GDDR7, a next-generation graphics DRAM optimized for gaming and AI workloads, will be showcased at the 2025 Korea Tech Festival in Seoul on December 4, 2025. [REUTERS/YONHAP]

Samsung Electronics, which plans to unveil a new smartphone in February, is facing increasing pressure. Market research firm Counterpoint Research predicted in a report last month that smartphone memory prices will rise by another 40% by the second quarter of this year.

As a result, smartphone production costs are expected to rise by 8-15%, and average selling prices are expected to rise by 6.9% year-on-year.

Samsung has frozen the domestic retail price of the Galaxy S series for two consecutive years starting in 2024. However, the industry believes it will be difficult to maintain that policy this year as the prices of core components have soared.

A crowd is seen during the “Galaxy Unpacked 2025” event at the SAP Center on January 22, 2025 in San Jose, California. [SAMSUNG ELECTRONICS]

Last year's price was 1.15 million won (approximately 80,000 yen) for the basic model of Galaxy S25, 1.35 million won for S26 Plus, and 1.7 million won for S26 Ultra, all of which were 256 GB versions.

Global tech companies have already started raising prices. Xiaomi, which has built its brand with emphasis on cost-effectiveness, has increased the price of the recently released Xiaomi 17 Ultra by about 10 percent compared to the previous model. Dell has increased the prices of major products by 15-20% since mid-December.

Taiwanese PC manufacturers Asus and Acer have also indicated plans to reflect the rise in memory prices in their PC prices.

This article was originally written in Korean and translated by a bilingual reporter using generative AI tools. It was then edited by a native English speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
Written by Woo Rim Lee [[email protected]]