Smartphone prices rise globally due to new processors

By Alimat Aliyeva

Smartphone manufacturers around the world are preparing to raise prices on upcoming devices. According to industry sources, the main reason is an increase in production costs — Taiwan's TSMC (Taiwan Semiconductor Manufacturing Company) has notified its partners of a 5–10% price hike on its chips.

This move is expected to directly impact the cost of new smartphones, as TSMC produces the processors used in many flagship models. For example, the upcoming iPhones, expected to be announced in September, will be powered by TSMC-made chips. Similarly, the next-generation Samsung Galaxy S26 lineup is set to feature Qualcomm's Snapdragon 8 Gen 2 Elite processors, which are also manufactured by TSMC. Qualcomm chips are used in most high-end Android smartphones as well, meaning the ripple effect of the price hike will be widespread.

Smartphones reflecting the new prices are likely to hit the market before the end of 2025.

In response, manufacturers are exploring ways to reduce their dependence on TSMC. Notably, Samsung is considering a return to using its in-house Exynos processors in flagship models, especially if it can develop chips that rival Qualcomm's in performance and efficiency. Meanwhile, several Chinese brands like Xiaomi and Oppo are ramping up efforts to develop their own chipsets to strengthen supply chain independence.

Interestingly, this shift is taking place at a time when demand for AI-powered features in smartphones is growing rapidly. This trend is pushing manufacturers to equip devices with more powerful and energy-efficient processors — further increasing the complexity and cost of chip production.