Samsung grapples with memory chip crunch, can’t rule out future electronics price hikes
Friday, 17 July 2026
The hunger of AI companies for memory chips means this essential component of the smartphone has risen exponentially, but the country’s largest seller by volume says there’s no shortage of buyers.
Samsung New Zealand has an $800 million business in this country, the bulk of that smartphone sales, with about half a million sold each year and roughly 2.2 million of its phones in use here at any one time.
In an interview with The Post, Samsung New Zealand vice president of mobile and consumer electronics sales, Jens Anders, said despite the cost of living crisis and consumers generally having less discretionary income to spend, the smartphone market had been “resilient” compared with sales of other devices.
This was largely because they had become essential to modern life.
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“The phone seems to always be a very stable business,” he said.
But the price of smartphones was nowhere near as stable.
“The biggest challenge at the moment is what they call the phenomenon of ‘global RAMageddon’ - the severe price increase in RAM and memory chips that are a big portion of the cost of the materials of phones,” Anders said.
“Their price has been going up over the last, especially six months, and the market has remained relatively immune to it. People are still buying phones as they have been before.”
Globally, South Korean-based Samsung announced price hikes of up to US$100 on its tablets and Galaxy ranges in April, with its largest competitor Apple announcing its own hikes on iPads and MacBooks, ranging from US$30 through to US$300, the result of spiralling memory and storage costs sparked by the exponential rise of artificial intelligence.
Samsung offers 14 models of smartphone in New Zealand, ranging in cost between $279 and $4249 for its top of the range folding phone, and holds about a 46% share of the market.
But the local company - a midget within the global business, which generatesUS$233 billion in revenue each year - does sell a raft of other products in New Zealand. About a quarter of its sales are generated by its commercial business, selling goods like room air-conditioning systems and large displays, such as the big screen at Eden Park stadium.
The rest is consumer electronics across categories such as smartphones, TVs and fridges, with smartphones the largest part of that.
TV sales are in a downward trend locally at present, Anders said, following a big surge in sales during Covid-19 pandemic years of 2021 and 2022.
“But TV’s repurchase cycle is about five to six years, so we see the market recovering, and people coming back upgrading their TV,” he said.
Sales of the likes of fridges, ovens, washing machines and other appliances, meanwhile, moved with the development of new homes and renovations.
“With the new home market being a bit tricky over the last two years, there's fewer people moving house, so there's a little bit less demand in that market to upgrade appliances right now.”
Back to smartphones, and consumer habits were a “polarising picture”, with people tending to buy premium or lower-cost products, and less attracted to the middle: “We need some activation support in that mid-range, that mid-range always seems to struggle a little bit, but the top range is doing well, and the bottom range is doing well.”
Anders was keen to emphasise Samsung’s dominance in the market, even if it is not always considered that way by everyday consumers.
“A lot of people think about Apple as the number one brand, but in quantities almost every second person in New Zealand has a Samsung phone,” he said.
Memory chip woes
The shortage of long and short term chips comes as AI giants hoover up 70% of the global memory supply.
The shortage is so severe that some companies have shut down certain consumer-facing lines just to feed enterprise AI clients, leaving companies worldwide scrapping over whatever is left.
Samsung is a maker of chips, and so is experiencing a “demand shock” for them. It is also having to sacrifice some of its capacity to supply AI clients, with consumer applications taking second place.
And that is understandable given just how business is being generated - Samsung has just projected a 18-fold surge in quarterly operating profits off the back of this trade.
Anders confirmed the biggest challenge for the company currently was making sure it had competitive product and was able to keep up with chip demand amid the global shortage.
Despite being a chip manufacturer, Samsung could not rule out further price hikes across its own ranges.
“Although we are making the chips, are we immune to price increases? Certainly not. The chip market is quite volatile and fast moving,” said Anders.
“Based on chip order books of these big AI data centres, memory chip pricing will remain high globally until 2028, but that means these high prices for electronics will remain globally.
“The biggest task [we are working through] is how can we still make sure that all our products are not out of reach. That’s the biggest challenge.”