Report: Samsung execs anxious firm might lose cash on smartphones for the primary time

Manufacturing smartphones is getting far more costly.

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Counterpoint Analysis

The excellent news for Samsung is that whereas the MX division struggles, its semiconductor division is raking it in. Samsung Semiconductor has smashed information within the first quarter of 2026, incomes an estimated $38 billion (KRW 57.2 trillion) in revenue. That’s greater than seven instances its internet from Q1 2025.

Samsung, Micron, and SK Hynix are all accelerating plans to broaden reminiscence and storage manufacturing strains—Samsung particularly has began spinning down LPDDR4 manufacturing to spice up the provision of LPDDR5—however Nekkei Asia tasks that gained’t be sufficient. Even with best-case enhancements in output, DRAM manufacturing in 2027 might fall 40 p.c wanting anticipated demand. The one factor that might problem that prediction is a considerable change in demand for AI functions. With a lot of the world’s tech giants firmly dedicated to increasing AI compute by means of subsequent 12 months, it’s unlikely that provide constraints will ease quickly.

Greater demand, larger costs

There are already indicators that RAM and storage prices are making telephones costlier. Motorola not too long ago raised the value of its Moto G finances telephones by as much as 50 p.c. Low-cost gadgets just like the Moto G will really feel the rising price of elements essentially the most, making the very thought of a finances cellphone within the coming years suspect.

With the prospect of sinking profitability in 2026, Samsung can also be making adjustments. The not too long ago launched Galaxy A37 and A57 mid-range gadgets include a $50 worth hike during the last technology. The corporate has additionally elevated costs on some costlier gadgets, including $80 to the Galaxy Z Flip 7 (512 GB) and Z Fold 7 (512 GB and 1 TB). A few of its tablets are additionally extra spendy, together with a $100 improve for the Galaxy Tab S11.

With profitability doubtful, Samsung is on the verge of releasing new, ultra-expensive telephones. This summer time, the corporate will debut a brand new technology of Galaxy Z foldables, that are at all times priced even larger than the Galaxy S collection. These gadgets include ample storage and RAM to assist justify the exorbitant worth tags. That makes them prime candidates for worth hikes that go away foldables much more unrealistically costly.