Samsung’s Smartphone Chipset Expenditure Soars to Nearly $7 Billion in 2023

by Farhan Yousaf
Snapdragon 8 Gen 2

Samsung’s latest financial reports for smartphone chipset expenditure in 2023 have revealed a significant surge, pointing to a marked increase in costs compared to previous years.

According to recent data, Samsung has faced a substantial upswing in smartphone chipset costs, with expenditures nearing $7 billion in 2023 alone. This figure represents a staggering 204% surge from the $2.3 billion spent in 2019. The company’s reliance on external suppliers, especially Qualcomm and its Snapdragon chipsets, has primarily contributed to this notable cost escalation.

Samsung’s increasing reliance on Qualcomm for smartphone chipsets drives up expenses significantly. This dependence hampers Samsung’s capacity to improve its Galaxy S flagship series specifications. Consequently, Samsung lags behind rivals in equipping its flagship lineup with top-notch features, especially in areas like RAM.

Implications for Samsung’s Product Line

Inflated costs and reliance on external suppliers are causing Samsung to limit the RAM capacity of the upcoming Galaxy S24 lineup to 12GB. Competitors, offering devices with 24GB RAM at lower prices, highlight Samsung’s concerningly less competitive position in the aggressive smartphone market. This shift is driven by the high costs associated with external chipsets.

Year Smartphone Chipset Expenditure
2019 $2.3 billion
2020 $7.1 billion
2023 $6.943 billion

The costs of smartphone chipsets are rising and expected to continue. Qualcomm’s upcoming releases, like the Snapdragon 8 Gen 4, may add strain to Samsung’s margins. To tackle this challenge, Samsung must intensify efforts to develop in-house solutions, like the Exynos range. Investing in comparable quality proprietary chipsets could significantly reduce costs and strengthen Samsung’s industry position.

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