Samsung may raise the prices of its smartphone components, including DRAM, flash memory and AMOLED panels, to cover the loss incurred by the Galaxy Note 7 recall, according to foreign reports.

Local analysts believe that Taiwanese manufacturers including Nanya Technology and Winbond Electronics may benefit from Samsung’s price increase and receive more orders for the components. The analysts said that except for AMOLED panels, for which Samsung has a global market share of 97 percent, Taiwanese manufacturers are capable of supplying all other DRAM and flash memory products.

Samsung has considered the Note 7 a challenger to Apple’s iPhone 7. However, the South Korean company was forced to recall, and later drop the device after numerous reports of the phone catching on fire worldwide. Analysts forecast the loss of the recall to be over US$17 billion.

Samsung was recently reported to plan on jack up the prices of DRAM, flash memory and AMOLED panels to cover part of the loss.

Samsung now leads the world in DRAM, flash and AMOLED market share. According to market research firm DRAMeXchange, as of Q2 2016, Samsung’s global market share in DRAM was 61.5 percent, 36.3 percent in flash memory and over 97 percent in AMOLED. The price hikes may not sound like so much of a good news for the global smartphone supply chain, although it may help Samsung increase its revenues.

Globally, the prices of mobile DRAM and flash memory have been on the rise, driven by new technology such as DDR4 and UFS 2.0. The price increases may become steeper following the Note 7 issues.

In addition, the industry has been faced with an AMOLED shortage since the beginning of 2016, and Samsung is dominating the market. An increase in the AMOLED price by Samsung will impact many smartphone brands, particularly those in China. Smartphone makers will be tasked to maintain the balance between supply chain costs and retail prices.

By: DocMemory
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