Samsung To Raise Chip Prices By 20% : Handset Costs To Soar

July 05, 2022
Samsung To Raise Chip Prices By 20% : Handset Costs To Soar

We’ve written extensively on the two components of a Smartphone/Handset : Electronic Bill of Materials (EBOM) and Software Bill of Materials (SBOM).

Our CEO was the former Director of Business Strategy for AMD’s Wireless Business Unit and he became intimately familiar with EBOM and the significance of all of the various chipsets and electronic components that go into creating a hardware reference platform and then the associated final product.

He was also the former Global Director of Operator Sales for Symbian’s Division UIQ where he learnt all about the SBOM associated with making the EBOM work and the various layers of software that go into a Smartphone.

We’ve reported extensively on the fact that a 5G handset will always be more expensive (30%+) on a like for like and time for time basis vs. 4G… The differential is just in the radio stack complexity and the associated antennae requirements vs. 4G.

Now add in all the new chipsets that are providing new functionality.

If Samsung is going to increase chipset prices by 20% then the OEM’s are going to pass this straight through (possibly with markup) to the Telecom Operators.

Has anyone noticed what is happening to the P&L of a Telco these days? Handset sales which have been the only growth driver are starting to fall precipitously (no more stimmy cheques to fund new phones) and service revenue starting to grow materially for the 1st time in 5 years due to inflation related price increases.

Handset prices to go up across the board by 15% to 20% 2022 to 12/31/2023

Wireless rate plans will continue to go up by 10% to 25% depending upon the rate plan to 12/31/2023

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Our previous reporting on this topic can be found in the following links :

Samsung Chipset Article Source :