Samsung, Apple outpace rivals as global memory chip crunch hits Chinese smartphone makers
Seoul, April 28
Samsung Electronics and Apple are currently navigating a tightening global memory chip supply that is simultaneously squeezing Chinese smartphone vendors and reshuffling market leadership. While the broader mobile industry faces a shipment decline, these two manufacturers are leveraging financial strength and internal supply chains to maintain growth amidst a critical shortage of low-power DRAM.
According to a report by The Korea Herald, global smartphone shipments fell 4.1 per cent on-year to 289.7 million units in the first quarter. This marks the first January-March decline since 2023. During this period, Samsung secured the top spot with 62.8 million shipments and a 21.7 per cent market share, followed by Apple with 61.1 million units and a 19.6 per cent share.
The report highlighted that they were the only two brands among the top vendors to post year-on-year shipment growth. It attributed this divergence to a tightening supply of LPDDR, which is essential for mobile devices.
Demand for these chips is currently being driven by Nvidia, as the US chip giant requires large volumes of LPDDR-based memory for its next-generation AI and graphics processing unit platforms, such as the upcoming Vera Rubin GPU.
"Apple has both financial firepower and bargaining power, allowing it to secure DRAM supply even at a premium," the report quoted an industry source. "Samsung is also minimizing procurement disruptions through close coordination between its mobile experience division and device solutions division."
The situation is markedly different for Chinese smartphone makers, who lost significant ground in the first quarter. Xiaomi's shipments dropped by 8 million units compared to the previous year, while Oppo and Vivo also saw their market shares tighten.
The report mentioned that these companies lack the internal manufacturing cushion of Samsung or the massive prepayment arrangements Apple utilizes to lock in components.
"Chinese manufacturers have a high exposure to budget and midrange models, which makes it difficult for them to reflect higher component costs in retail prices," the report quoted another industry source. "If they raise prices, sales volume could fall. If they keep prices unchanged, profitability suffers. They are caught in a dilemma."
Market watchers expect memory prices to remain high, with stabilization not anticipated until the second half of 2027.
"IDC (International Data Corp.) expects the supply shortage to drag global smartphone shipments down by roughly 12.9 percent this year to 1.12 billion units, reaching the lowest level since 2013," the report said.
For budget-heavy vendors like Xiaomi, which operated at a 10.9 per cent gross profit margin last year, absorbing these rising costs is becoming increasingly difficult.
"This memory shortage could become a turning point that reshapes the competitive order of the smartphone market," the report quoted an analyst at a local brokerage. "In the past, design, cameras and price competitiveness were the key factors. Going forward, the ability to secure core components reliably could determine shipments and market share."
— ANI
Reader Comments
It's interesting how the chip shortage is actually reshaping the market. Samsung benefits from having its own foundries, and Apple can throw money at suppliers. But this could hurt innovation in budget phones that India relies on. We need a self-reliant chip manufacturing ecosystem. 🇮🇳
This just proves that hardware reliability is more important than fancy cameras or software features. Companies that control their supply chain will survive. However, this might also push Chinese brands to innovate faster, which could be good for competition. Let's see if OnePlus or Xiaomi can adapt.
As someone working in tech, this makes sense. Memory is a commodity everyone needs but only few can command. Apple's bargaining power is unmatched. On the downside, I worry this will make high-end phones even more expensive globally, and India's market might stagnate if affordable options shrink.
Actually, this is a wake-up call for Indian smartphone brands. We rely too much on Chinese manufacturers for components. Time for India to invest in local memory chip fabrication. Make in India isn't just about assembling phones, it's about making chips too. Otherwise we'll always be at the mercy of global supply chains.
I switched from an iPhone to a Xiaomi last year specifically because of price. Now I'm worried about future updates and support. Maybe I should have stuck with Samsung's mid-range models. But honestly, this chip shortage won't last forever, and consumers should just wait for prices to stabilize before upgrading.
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