Tech giants facing higher cost burdens amid supply chain disruptions

South Korean tech giants faced higher production costs in 2025 as they felt the pinch from inflation, data showed on Sunday, with the supply chain crisis stemming from Middle East tensions set to further increase pressure this year.

According to a regulatory filing by Samsung Electronics Co., the company spent 99.94 trillion won on purchasing raw materials in 2025, up 8.8 percent, or 8 trillion won, from a year earlier. The data excludes the firm's wholly owned subsidiary Samsung Display Co.

The sharp rise was mostly attributable to the firm's Device Experience (DX) division, which includes mobile and TV businesses, with the segment spending 74.5 trillion won on raw materials, up nearly 7 trillion won from a year earlier, reports Yonhap news agency.

LG Electronics Inc. also spent 17.4 trillion won on raw materials in 2025, up 5.6 percent from a year earlier.

Industry watchers said the U.S.-Iran war is expected to lead to higher oil and logistics costs this year, eventually leading to even greater cost burdens for tech giants.

Tech manufacturers had already been facing mounting pressure amid memory price hikes following the artificial intelligence (AI) boom.

"With the Middle East crisis adding to existing challenges, major companies are implementing emergency management measures, including improving production efficiency through AI transformation and cutting costs," an industry official said.