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South Korea tech giants face rising raw material costs
South Korea’s biggest tech firms reported higher raw material outlays in 2025 as inflation pushed up costs, and a Middle East supply-chain crisis is expected to add further pressure this year.
According to a regulatory filing by Samsung Electronics Co., the company spent 99.9 trillion won (US$66.43 billion) on purchasing raw materials in 2025, up 8.8% or about 8 trillion won (US$5.31 billion) from 2024; the figure excludes its wholly owned subsidiary Samsung Display Co.
Meanwhile LG Electronics Inc. also spent 17.4 trillion won (US$11.57 billion) on raw materials in 2025, up 5.6% year-on-year.
Industry watchers warned the US-Iran war could raise oil and logistics costs and further increase pressure on tech manufacturers who are already facing memory price rises after the AI boom.
🔗 Source: Yonhap
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Implications, context, and why it matters.
Samsung’s device costs rise while its chip unit gains from AI-linked memory pricing
- Samsung’s Device Experience (DX) division, which includes mobile and TV, is dealing with higher material costs. Companywide operating profit for Q4 2025 is still expected to jump 208% year over year 1.
- Part of the lift comes from the semiconductor unit, which tends to earn more when memory-chip prices climb during an AI-driven demand cycle 1.
- Samsung is the world’s largest memory-chip maker. S&P Global Ratings called it the “biggest beneficiary” of high conventional memory prices, even as higher input costs squeeze consumer-device margins 1.
- LG Electronics, which lacks a semiconductor business on Samsung’s scale, posted losses over the same period covered in Samsung’s profit update 1.
Cost pressure spills into lawsuits and trade disputes
- Company responses now reach beyond factory planning into courts and government policy.
- In India, Samsung and LG are suing the government to block new e-waste (electronic waste) rules. They say the rules would raise recycling payouts and roughly triple their costs, while LG said in its filing that the situation stems from an “enforcement failure” by the authorities 2.
- In the United States, Whirlpool alleged that Samsung and LG adjusted internal product transfer prices to cut U.S. tariffs 3.
- Rising supply-chain and regulatory bills have made legal risk and trade rules part of day-to-day cost control.
