Full Breakdown
Samsung May Face First Smartphone Business Loss in 2026 Amid AI-Driven Memory Cost Surge
4/25/2026, 4:51:01 AM
Core Event: Warning of Potential First Net Loss in Smartphone Division
Money Today reports that Samsung MX (mobile experience) head TM Roh warned company leadership that the smartphone business could record its first net loss in 2026. The alert follows strong sales of the Galaxy S26 series but highlights mounting cost pressures that could reverse Samsung’s historic profitability in the segment.
Background & Context: Market Maturity and AI-Driven Memory Demand
Smartphones have transitioned from rapid innovation cycles to a mature market where new models appear only every few years. Concurrently, artificial-intelligence workloads have increased the importance of high-capacity LPDDR5x memory in mobile devices, reshaping component cost structures that previously favored processors and displays.
Data & Statistics: Memory Costs Now Dominating Phone Bill of Materials
Counterpoint Research estimates that RAM will represent more than one-third of the bill of materials for a budget phone in mid-2026, and over 20 % of costs in premium models. Nvidia’s Vera AI CPU, slated to replace Grace later in 2026, will integrate up to 1.5 TB of LPDDR5x memory—enough to supply the RAM of roughly 4,600 Galaxy S26 Ultra units (12 GB each).
Official Statements & Responses
TM Roh’s internal warning, as cited by Money Today, underscores the risk that soaring DRAM and NAND prices could erode the smartphone division’s profit margin. Samsung’s past performance, including continued earnings during pandemic-related supply-chain disruptions, is referenced to illustrate the unprecedented nature of the current cost challenge.
Verbatim Quotes
"The skyrocketing price of DRAM and NAND may be what finally breaks the streak." — Ars Technica, Technology News
Criticism & Opposition: Analyst Concerns Over Memory Price Volatility
Industry analysts, represented by Counterpoint Research, argue that the rapid rise in DRAM and NAND prices, coupled with component shortages affecting laptops and servers, could erode margins across the smartphone sector. The analysts contend that the AI era has effectively doubled memory and storage costs, challenging traditional pricing models.
Why It Matters: Potential Shift in Samsung’s Financial Landscape
A loss in the smartphone division would affect Samsung’s overall earnings, given the segment’s historical contribution to the conglomerate’s profit pool. The situation also signals broader supply-chain vulnerabilities as AI-centric hardware demands intensify, potentially influencing pricing strategies for other consumer electronics.
Conflicting Reports & Gaps: Absence of Direct Financial Disclosure
The article relies on secondary reporting from Money Today and Counterpoint Research; the source does not include Samsung’s own financial figures or an official comment on the projected loss. Consequently, precise loss amounts, timing of any corrective measures, and details of internal mitigation plans are not provided.
What’s Next: Upcoming AI CPU Launch and Memory-Cost Implications
Nvidia’s Vera AI CPU is expected to enter the market later in 2026, further increasing demand for high-capacity LPDDR5x memory. The AI era’s doubling of memory and storage costs highlights the importance of this development for the smartphone supply chain.
