Samsung is currently grappling with two conflicting forces that pose a significant challenge for the South Korean tech giant. On one end, price pressures are mounting due to the rising costs of components, while on the other end, the company has set an ambitious sales target for the upcoming Galaxy S26 series. This situation creates a complex dilemma, as Samsung must navigate competitive pricing strategies alongside increased marketing expenditures to achieve its goals.
According to a recent report by the South Korean publication MK, Samsung is aiming for an impressive 130 trillion won (approximately $90.3 billion) in annual sales for its smartphone-centric MX division by 2026. This target is ambitious, as it includes plans to sell 240 million smartphones and approximately 27 million tablets. Notably, Samsung's MX division is specifically targeting sales of 35 million units for the upcoming Galaxy S26 lineup.
In the first half of 2026, Samsung is forecasting sales of 24 million units for the Galaxy S26, a significant increase compared to the 22 million units sold of the Galaxy S25 during the same period in 2025. Furthermore, Samsung anticipates selling 5 million units of its Fold and Flip models, which are set to launch in July. This ambitious sales target reflects Samsung's desire to reclaim its market share, which it has lost to other original equipment manufacturers (OEMs) in recent years.
However, Samsung's goals for the Galaxy S26 series are complicated by the prevailing industry dynamics characterized by component cost inflation. A separate report from Taiwan's Electronic Times indicates that a price increase for the upcoming Galaxy S26 lineup is unavoidable due to the escalating costs of essential smartphone components. For example, Samsung launched the Galaxy S25 series (256 GB) at the same price point as the Galaxy S24 series, but maintaining price stability for the Galaxy S26 will be challenging.
According to Samsung's semiannual report released in August, the cost for mobile Application Processors (APs) has surged by 12 percent year-over-year, while camera modules have seen an 8 percent increase. Additionally, the growing demand for High Bandwidth Memory (HBM) for AI workloads is straining global DRAM capacity, leading to supply bottlenecks and price hikes for mobile-centric LPDDR5. The cost of a 96Gb LPDDR5 has risen by 16 percent compared to the first quarter of 2025, further complicating Samsung's situation.
Moreover, competitors in the market are also reacting to these cost pressures. Xiaomi has already raised the retail price of its Redmi K90 model, and other Chinese OEMs like Oppo and Vivo are following suit with their own price hikes. This industry-wide trend reflects the ongoing challenges associated with rising component costs.
In light of these developments, Goldman Sachs has issued a critical note regarding the smartphone industry, observing that smartphone gross margins are expected to remain under pressure for the next 12 to 18 months. This outlook does not bode well for Samsung’s ambitions with the Galaxy S26 series. The report highlights that the increased redirection of global DRAM capacity toward HBM, alongside rising smartphone DRAM content, continues to drive up costs.
TrendForce has revised its forecast for conventional DRAM pricing in Q4 2025, adjusting it upwards from an earlier estimate of 8-13 percent growth to between 18-23 percent, indicating a strong likelihood of further increases. Recent data from CMF suggests that prices for various LPDDR4X DRAM configurations have surged by 7-12 percent just since the end of September, with year-over-year increases ranging from 76-158 percent compared to Q4 2024.
The supply-demand imbalance for DRAM and NAND is poised to worsen in 2026, leading to a DRAM/NAND price upcycle throughout the year. For instance, the retail price of the Redmi Note 14 has seen a significant increase due to rising component costs, with the price of its 8GB+256GB configuration now making up 16 percent of the smartphone's retail price—up from just 10 percent a year ago. Similarly, the cheaper Redmi 15C has experienced a price increase in its 4GB+128GB configuration, highlighting the broader implications of rising component costs across the industry.
As Samsung seeks to achieve its ambitious sales targets for the Galaxy S26 series, it will need to navigate these complex challenges carefully, balancing pricing strategies with the realities of a rapidly changing market landscape.
