commanded. According to the S23 Ultra and S24 Ultra Bill of Materials (BOM) analysis, Samsung had to raise the retail price not just because of the switch to a lighter and sturdier frame made of titanium.
Chipsets become the priciest phone component
Qualcomm keeps adding AI features to its mobile Snapdragon chipsets, and raising their wholesale prices in the process, so Samsung had to pay a lot more for the Snapdragon Gen 2 than it had for a Gen 1 where AI was still a twinkle in the eye of Qualcomm’s engineering team.
The Snapdragon 8 Gen 2 chipset commands a third of the S23 Ultra’s production costs | Image credit — Counterpoint
Gone are the days when expensive OLED displays were a nascent technology and were the priciest component in phones. Now that they all have dynamic refresh rate and wide color gamut coverage capabilities, the focus has moved to AI processing power and global 5G connectivity band support.
The SM8750 (Snapdragon 8 Gen 4), which will enter mass production in 2H24, is expected to be priced 25–30% higher than the current flagship chip SM8650 (Snapdragon 8 Gen 3) at $190–200. This price increase is primarily due to adopting TSMC’s latest and more expensive N3E node. Benefiting from the AI-driven demand for high-end smartphones, the SM8750’s shipments will grow at a high single-digit rate vs. the SM8650.
Ming Chi-Kuo, industry analyst, June ’24
Now that Qualcomm has a deadlock on Galaxy AI feature processing combined with and 5G modem exclusivity for the US, Samsung will have to go with the flow and equip the Galaxy S25 Ultra with a Snapdragon 8 Gen 4 chipset, at least on this side of the pond.
Those constant price increases of AI processing power have brought about record stock price for Qualcomm and other AI chip makers, too.
Qualcomm’s price is riding high on record mobile chipset and modem prices | Image credit — Google Finance” 
Superior foundry technology comes with higher costs, though, so Qualcomm will reportedly have to price the Snapdragon 8 Gen 4 30% higher than its predecessor that is in the Galaxy S24 Ultra. This means that the processor in the S25 Ultra will likely cost $200 apiece for Samsung, and will undoubtedly grab an even larger share in its bill of materials.
Samsung won’t raise the Galaxy S25 Ultra and Watch 8 prices
A 30% cost bump of your most expensive phone component won’t be a laughing matter for Samsung, but it already raised the Galaxy S24 Ultra price by a Benjamin. It would be tough to justify another $100 S25 Ultra price bump for something that is under the hood and is not user-facing like a refreshed design, a second periscope camera, or some display breakthrough.
Samsung’s new 2nm roadmap pulls the Exynos 2600 release forward | Image credit — Samsung
In short, even if Qualcomm twists its customers’ hands with a $200 Snapdragon 8 Gen 4 chip made by TSMC, Samsung would have little recourse to raise the Galaxy S25 Ultra price further, and could save on production costs in other ways to compensate, instead of eating the difference.
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