Samsung’s smartphone chipset expenditure is slowly creeping upwards to a degree the place the Korean behemoth is now being pressured to compromise on the options that ship with its general Galaxy vary. Because of an excessive reliance on exterior corporations reminiscent of Qualcomm and its Snapdragon chipsets, Samsung’s prices have risen to nearly $7 billion alone this 12 months, which is greater than a 200 p.c enhance in comparison with the $2.3 billion it paid again in 2019.
Continued enhance in Samsung’s smartphone chipset expenditure additionally explains why it lags in upping the specs of its Galaxy S flagship sequence
Growing cutting-edge smartphone chipsets on superior manufacturing processes is an costly endeavor, and in response to the statistics shared by Revegnus on X, Samsung is discovering out the onerous means. Final 12 months, Samsung needed to pay a $7.1 billion invoice in smartphone chipset prices, and with 2023 already reached $6.943 billion, it’s secure to imagine that the corporate shall be paying round 10 p.c extra this 12 months, with a rise anticipated to occur in 2024 too.
It goes with out saying that these prices can’t be sustained except Samsung comes up with an environment friendly answer, which is decreasing its dependency on Qualcomm and utilizing extra of its in-house answer, the Exynos vary. This expenditure enhance can even clarify why Samsung continues to lag behind the competitors in outfitting its Galaxy S flagship lineup with spectacular specs, significantly relating to RAM.
In keeping with a earlier rumor, the corporate is once more limiting the Galaxy S24 lineup to characteristic 12GB RAM, whereas the competitors isn’t just continuing with launches sporting the Snapdragon 8 Gen 3, however are bought for a lower cost and have a whopping 24GB of RAM, with the newest entrant being the OnePlus 12. One can argue that Samsung pushes extra quantity than its different Android opponents, however the Korean big’s shipments haven’t drastically elevated in comparison with final 12 months.
The quantity Samsung spends on buying cellular utility processors has been rising through the years.
From early 2023 to the third quarter, Samsung paid $6.943 billion for cellular utility processors, marking a ten.4% enhance in comparison with the identical interval final 12 months.…
— Revegnus (@Tech_Reve) December 2, 2023
The state of affairs sooner or later shouldn’t be anticipated to enhance both, with Qualcomm’s Snapdragon 8 Gen 3 rumored to be dearer than the Snapdragon 8 Gen 2, which was already priced painfully for Qualcomm’s cellphone companions because it fetched an estimated $160 for the whole package deal. Additionally, with the Snapdragon 8 Gen 4 arriving subsequent 12 months with its customized Oryon cores, Qualcomm has already hinted that will probably be dearer than the Snapdragon 8 Gen 3, and that can as soon as once more eat into Samsung’s margins, regardless of the enhancements of the silicon.
It can’t be emphasised sufficient that the agency must push ahead with its Exynos chipset growth, as making its personal SoCs on par with the competitors will enable Samsung to avoid wasting billions in prices. If the corporate can’t discover its means round this impediment, it should proceed to face this vicious cycle, and some extent might arrive the place customers discover little attraction in future Galaxy S gadgets, which can diminish its model worth.
Information Supply: Revegnus
