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

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

The sharp rise in costs was mostly attributable to Samsung's Device Experience (DX) division, which includes mobile and TV businesses. This segment spent 74.5 trillion won on raw materials, up nearly 7 trillion won from the previous year.

Similarly, LG Electronics Inc. reported spending 17.4 trillion won on raw materials in 2025, representing a 5.6 percent increase from a year earlier.

Industry watchers noted that the ongoing U.S.-Iran war is expected to lead to higher oil and logistics costs this year, further exacerbating cost burdens for tech giants.

Tech manufacturers were already grappling with mounting pressure due to 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 stated.