Samsung Electronics' accumulated mobile application processor (AP) purchase expense for the third quarter this year is estimated to be close to 11 trillion won.
On the 16th, according to Samsung Electronics' recently disclosed third-quarter business report, the amount the company spent to buy mobile APs during the period totaled 10.9275 trillion won. That was up 3.1376 trillion won from the cumulative amount in the first half. Compared with the same period a year earlier, it rose 25.5%. As a result, the share within the Device eXperience (DX) institutional sector's total materials and supplies increased from 16.6% to 19.1% over the same period. Both the scale and share of mobile AP purchases are at all-time highs.
This is interpreted as an expense increase due to a sharp rise in prices for memory products overall, including mobile APs, recently. According to Samsung Electronics' quarterly report, the price of mobile AP solutions in the third quarter this year was about 9% higher than last year's annual average. While rising memory prices are a factor that can boost revenue for the Device Solutions (DS) institutional sector in charge of Samsung Electronics' semiconductor business, they worsen profitability for the DX institutional sector, which uses them as materials and supplies.
Mobile APs, which serve as the brain of smartphones, typically account for more than 30% of a smartphone's cost. The foldable phone "Galaxy Z Fold7," released in Jul., is equipped with Qualcomm's mobile AP, Snapdragon. The "Galaxy Z Flip7" uses the in-house developed mobile AP "Exynos 2500."
Samsung Electronics is reportedly considering equipping the Galaxy S26 series, set for release early next year, with the latest chip, "Exynos 2600." Exynos 2600 is designed by Samsung Electronics' System LSI Division and manufactured by the Foundry Division. It is advantageous for cost reduction compared with Qualcomm products.