SAMSUNG’S CONTRARIAN BET: USING “CHINESE CHIPS” TO BREAK INTO CHINA’S MOBILE MARKET
A Samsung Electronics official said the matter “could not be confirmed.”
Samsung Electronics is weighing whether to use cheap Chinese-made DRAM to chase market share in China's budget smartphone segment, semiconductor analyst Jukan reported on July 27, citing Korean industry sources. The idea centers on Galaxy A-series budget phones, not the flagship line.
The AI data-center buildout has companies like Nvidia buying up so much memory that prices are spilling over into phone makers' costs too. When rising chip prices push up the price of finished devices, the industry calls it "chipflation." Apple already raised MacBook and iPad prices by about $100 in June, and is expected to raise iPhone prices this fall. Chinese makers like Xiaomi, Oppo, Vivo and Honor don't have Apple's brand pricing power, so they can't pass the cost increase to buyers. Several have voluntarily cut shipments by 15-20%, reasoning that selling more would only widen losses.
Samsung currently holds just 0.6% of China's smartphone market. If cheaper Chinese DRAM lowers the cost of Galaxy A-series phones, Samsung could use that price edge to grab the share its rivals are voluntarily giving up. Shim Woo-jung, a research fellow at the Korea Institute for Industrial Economics and Trade, said Samsung "could meaningfully increase share by expanding supply of lower-priced models like the Galaxy A series, given that major Chinese rivals have sharply cut production."
The same chipflation is squeezing Samsung's own Mobile eXperience (MX) division. Brokerages have slashed second-quarter estimates: Hana Securities projects a 200 billion won loss, Samsung Securities 584.1 billion won, Eugene Investment & Securities 1 trillion won, and iM Securities 800 billion won. Samsung Securities' swing is the starkest, going from a 3.41 trillion won full-year profit forecast to a 5.841 trillion won loss forecast, a multi-trillion-won reversal from black to red.
Selling cheap eats into margins, plain and simple.
The moment rivals retreat is exactly when there's share to take.
A Samsung Electronics official said the matter "could not be confirmed."
Why it matters · This is a fork in the road for Samsung's phone business: absorb the memory-cost hit, or use rivals' retreat to grab share. Q2 earnings will be the first clue.
Worth asking · Is trading a Chinese-DRAM discount for an MX-division loss actually a good bet for Samsung?
Awaiting gradingCheck when Samsung reports Q2 2026 earnings whether the Mobile eXperience division actually swung to an operating loss, as several brokerages estimated.