Jakarta, Indonesia – Samsung’s newly released Galaxy S26 series is hitting the market with a significant price increase, a move that analysts suggest reflects the growing pressures of a global chip shortage and its impact on production costs. In Indonesia, the standard Galaxy S26 model, configured with 12GB of RAM and 256GB of internal storage, is priced at IDR 16.5 million (approximately $1,065 USD), a rise of IDR 1.5 million (approximately $97 USD) compared to its predecessor.
The price hikes extend to other configurations as well. The 12GB/512GB version of the Galaxy S26 sees an increase of IDR 2.5 million (approximately $162 USD). Similar price adjustments are similarly being applied to the Galaxy S26+ models, with increases of IDR 1.5 million (approximately $97 USD) for the 12GB/256GB variant and IDR 2.5 million (approximately $162 USD) for the 12GB/512GB version. The premium Galaxy S26 Ultra, boasting 16GB of RAM and 1TB of internal storage, now carries a price tag of IDR 32 million (approximately $2,065 USD), a substantial jump from the previous generation’s IDR 29 million (approximately $1,870 USD) for a comparable configuration.
These price increases aren’t limited to Indonesia. Reuters reported on Thursday, February 26, 2026, that select models in the United States and South Korea are also experiencing price adjustments. The move is being interpreted, in part, as a way for Samsung to gauge market reaction amid the ongoing crisis in the memory chip supply chain, which is driving up production costs and eroding profit margins for consumer electronics manufacturers.
The Chip Crisis and Samsung’s Dilemma
Samsung had previously warned of the potential impact of a chip shortage, fueled by the rapid growth of artificial intelligence, on its smartphone and display businesses. However, the company’s chip business itself is experiencing a boom, driven by high demand for chips used in AI development, which is simultaneously increasing their price. “The overall significant shortage of memory products is expected to continue for the time being,” Samsung executive Kim Jaejune told analysts during an earnings conference call in January 2026, as reported by Reuters.
In the fourth quarter of 2025, Samsung reported a more than threefold increase in operating profit, reaching a record high. This surge was largely attributed to its strength as a leading manufacturer of memory chips, benefiting from the increased demand and higher prices associated with AI development. However, the company also cautioned that rising chip prices would inevitably increase production costs in its smartphone and display divisions.
Samsung’s chip business saw a 470% jump in operating profit, reaching a record 16.4 trillion won in the fourth quarter of 2025, accounting for over 80% of the company’s total profit. Conversely, its mobile business experienced a 10% decline in profit, totaling 1.9 trillion won, directly impacted by the rising cost of chips. According to Sohn In-joon, an analyst at Heungkuk Securities, “The increase in memory prices is expected to increase this quarter and is likely to provide an earnings surprise, while the burden of memory costs will intensify on its mobile business.”
Challenges for Samsung’s Mobile and Display Businesses
Samsung’s smartphone and display divisions have warned of a “challenging year” ahead in 2026, citing the pressure from increasing memory prices. The smartphone division plans to collaborate closely with its key partners to ensure a stable supply of products and improve resource efficiency to mitigate potential profit declines, according to Samsung executive Cho Seung.
In a recent interview with Reuters, Samsung Co-CEO TM Roh described the current chip shortage as unprecedented, adding that further price increases were not off the table. This prediction has now materialized with the launch of the Galaxy S26 series. It remains unclear whether Samsung’s mid-range Galaxy A series will also be subject to similar price increases. Analysts suggest that the chip crisis will likely have the most significant impact on lower-priced phones, as manufacturers in that segment typically operate on smaller margins and rely on high sales volumes. “The key issue will be how this division [Samsung Mobile] maintains margins throughout the year,” noted Ko Yeongmin, an analyst at Daol Investment & Securities.
Samsung’s display business also anticipates weaker smartphone demand in the current quarter due to the rising chip prices and expects customers to push for price reductions. Despite these challenges, the display business saw a more than twofold increase in profit, reaching 2 trillion won in the fourth quarter of 2025, driven by strong sales of the iPhone 17 series.
The price increases for the Galaxy S26 series signal a broader trend in the smartphone market, where manufacturers are grappling with rising component costs and supply chain disruptions. Consumers may need to adjust to higher prices for their next smartphone upgrade, as the industry navigates these ongoing challenges. The next key event to watch will be Samsung’s earnings report for the first quarter of 2026, which will provide further insight into the impact of the chip crisis on its overall performance.
Have your say: What are your thoughts on the rising prices of smartphones? Share your comments below.
Worth a look
