Report: Samsung execs worried company could lose money on smartphones for the first time
Summary
Samsung executives are concerned the company might lose money selling smartphones for the first time in 2026. The rising cost of memory and storage components, driven by demand for AI technology, is making phones more expensive to produce.Key Facts
- Samsung’s mobile division head TM Roh warned of a possible net loss on smartphones in 2026.
- Despite strong sales of the Galaxy S26, rising prices of DRAM and NAND memory are increasing costs.
- Memory and storage now make up a larger share of smartphone component costs, especially RAM.
- AI advancements require much more memory, pushing up hardware prices across the tech industry.
- Samsung’s semiconductor division is very profitable, earning $38 billion in Q1 2026.
- Production of DRAM and other memory may not meet demand in 2027, potentially falling short by 40 percent.
- Samsung has raised prices on mid-range and premium phones, such as the Galaxy A37, A57, and Z Flip 7.
- Budget phones are becoming more expensive due to higher component costs, challenging the low-cost phone market.
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