The DX (Device eXperience) division of Samsung Electronics has shifted its product strategy and launched workforce efficiency measures as the cost burden from the sharp rise in memory semiconductor (hereinafter "memory") prices continues. The company has withdrawn its decision to equip the Ultra, the top-tier model of the Galaxy S27 series, with its in-house application processor (AP), and is also promoting operational efficiency through artificial intelligence transformation (AX).
According to electronics industry sources on the 15th, Samsung Electronics recently reversed its decision to apply its in-house AP, Exynos 2700, to the Galaxy S27 Ultra. The top-tier model will now feature Qualcomm's Snapdragon chip exclusively.
Initially, the Galaxy S27 Ultra was developed on the premise of exclusive Snapdragon adoption. However, due to errors in Qualcomm's next-generation chip and the fact that Exynos 2700 performance exceeded expectations, Samsung Electronics had decided to equip the device with both APs.
During this process, production volume shortages and increased additional costs held back the Exynos 2700. In reality, while production volumes increased by more than 10% compared to the previous generation (Exynos 2600), it became difficult to secure the additional allocation for the Ultra model. Samsung Electronics reportedly considered a plan to increase the proportion of Snapdragon in the standard and Plus models and divert Exynos units to the Ultra, but concerns were high that existing components would remain as inventory and that new parts specifically for the Ultra would need to be procured.
The sharp rise in memory prices, which increased the cost burden on the DX division, also had an impact. According to market research firm TrendForce, contract prices for low-power DRAM (LPDDR5X) for smartphones surged 78% to 83% in the second quarter of this year compared to the previous quarter. It is estimated that the average selling price (ASP) of DRAM will rise by an additional 8% to 13% in the third quarter as well. Industry observers believe it was difficult to change the AP supply configuration for the Ultra while bearing such additional costs.
Ultimately, the System LSI division missed the opportunity to expand its in-house AP supply to top-tier smartphones. Despite performance improvements in the Exynos 2700, the final decision was changed due to the cost burden on the DX division.
The DX division is also accelerating efforts to improve workforce operational efficiency. It is reported that a recent directive was issued to the MX (Mobile eXperience) division to reduce full-time equivalent (FTE) headcount by 20% through AX. FTE is an indicator that converts workload into full-time working personnel and is distinct from actual layoffs.
Previously, the DX division conducted an "L7" survey in which employees were required to list their assigned tasks down to detailed work sequences, aiming to identify tasks that could be automated with AI (artificial intelligence). It was reported that there was a target of reducing headcount by approximately 15% at the time, but the survey was halted after employees protested over layoff concerns. The DA (Home Appliances) division has also been running "DAgenius," a survival-style employee idea solicitation program for solving internal and external challenges, since last August.
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