Samsung launches S26 smartphone as sector braces for memory chip crunch

Samsung Electronics unveiled its latest series of flagship smartphones on Wednesday, with two of the models costing $100 more than their predecessors as the industry tries to recover from a global shortage of memory chips.Samsung is touting improved AI and a privacy display in its new models against a backdrop of industry-wide memory chip shortages brought about by the rapid scaling of AI infrastructure.The average selling price of smartphones in 2026 was expected to rise 6.9% as a result of the memory crunch, Counterpoint Research said in a note in December.The starting price has stayed flat on the highest end model, the S26 Ultra, compared to last year's S25 series. The S26 and S26+ saw a $100 rise compared with their S25 predecessors:Ben Wood, chief analyst at CSS Insight, told CNBC the chip shortage was "not a short-term issue."He added: "We expect the global shortage of memory chips to persist well into 2027, primarily driven by the rapid expansion of AI infrastructure, which is diverting supply away from smartphones, PCs, and other consumer electronics."The S26 series is the third of "AI phones" by Samsung, following the S24 release two years ago. The company says the new models' processing chips are faster than those of previous generations. It added they use AI tools to help with things like photo editing and document scanning.Samsung's S26 series does take some "positive steps forward" in making AI features easier to use for consumers, said Wood. But, he added: "I fear that consumers will still question how much value it really offers at this juncture."Wood added the "stand-out feature" on the S26 Ultra is its privacy display, which controls how pixels disperse light, limiting what those viewing from side angles can see. The company says this feature is a world first.Memory prices in segments such as smartphones have doubled over the past two quarters, according to CSS Insight research, said Wood.While memory manufacturers are investing in new capacity, the chip shortage is expected to last until 2027 or early 2028, he added."Rising memory semiconductor prices are a global issue and impacts the global broader industry," a Samsung spokesperson told CNBC.They added: "Samsung expects to be relatively well-positioned on the supply side through strategic partnerships and will continue efforts to minimize the impact on its business by responding flexibly to market changes."Smartphone makers are looking at ways to mitigate the memory shortage risk by diversifying suppliers, Paolo Pescatore, TMT analyst at PP Foresight, told CNBC. The memory crunch is no longer a "niche supply-chain talking point", he added, but a "strategic constraint on the AI roadmap.""If memory costs stay elevated, Samsung faces a familiar squeeze: protect margins or protect volumes," Pescatore said.Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

All Rights Reserved. A Versant Media Company. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Data also provided by