Rumored Samsung plan to revive phone sales in China likely won't work

Samsung's phone market share in China is practically non-existent, even though it is the dominant player in the global smartphone market.

If a new rumor is to be believed, Samsung has a plan to revive its phone sales in the People's Republic by leveraging a crisis it's fully benefiting from.

Memory chip prices have skyrocketed over the past year with no end in sight. Manufacturers, including Samsung's own mobile division, are raising prices and passing on the impact to consumers. On the other hand, Samsung's semiconductor division is one of the biggest beneficiaries, as it's among the top three players in the global memory market.

Chinese memory companies are not just behind in terms of technology but their access to major clients like Apple is also restricted due to US regulations. So the simple play here would be to buy affordable chips from Chinese companies for phones that are to be sold in China.

That's what the rumor claims Samsung intends to do, opting for “low-cost” Chinese DRAM and using them in low-end and mid-range phones to increase its market share in China. There's just one small problem, Chinese DRAM is anything but “low cost.” Some reports claim that CXMT, one of the country's largest memory suppliers, is actually charging more for DDR5 than Samsung.

There's a reason why Chinese OEMs like Huawei and Xiaomi who are dominant in their local markets aren't raising shipments. It's unlikely there exists any memory pricing arbitrage for Samsung to carry out and increase its foothold in China because if such arbitrage existed, local OEMs wouldn't be caught between the same rock and a hard place as every other OEM in the world.